Guernsey *
Trust
Guernsey, a British Crown Dependency in the Channel Islands, has established itself as a jurisdiction with a sophisticated and stable legal system, particularly in the area of trust law. The primary legislation governing trusts in Guernsey is the Trusts (Guernsey) Law, 2007, which offers a flexible and modern legal framework grounded in common law principles. Guernsey trusts are frequently used for asset protection, succession planning, wealth management, and philanthropic purposes.
A Guernsey trust is a legal relationship in which a settlor transfers assets to a trustee to hold for the benefit of specified beneficiaries or for a defined purpose. The trust does not have separate legal personality, but the trustee holds legal title to the trust property and is bound to manage it in accordance with the terms set out in the trust deed and the governing law. Guernsey law permits various types of trusts, including discretionary trusts, fixed-interest trusts, charitable and non-charitable purpose trusts, and reserved powers trusts.
One of the features of Guernsey trust law is the recognition of settlor autonomy and flexibility. For example, the law allows for the reservation of certain powers by the settlor, including investment decision-making, asset distribution, or the right to appoint or remove trustees. Such provisions, when clearly drafted, are enforceable under Guernsey law, provided they do not undermine the trustee’s fundamental duties.
Guernsey does not require trusts to be registered or publicly disclosed unless they own Guernsey real estate or have Guernsey-resident beneficiaries in certain circumstances. This provides a degree of privacy for parties involved in trust structures, though trustees remain subject to Guernsey’s financial crime and anti-money laundering regulations, including due diligence, record-keeping, and reporting obligations under the relevant international standards and agreements.
A critical role in any Guernsey trust is played by the trustee. The trustee is responsible for administering the trust in the interest of the beneficiaries and in accordance with the terms of the trust instrument. Trustees may be individuals or corporate entities, and in Guernsey, many trusts are administered by licensed professional trust companies regulated by the Guernsey Financial Services Commission (GFSC). These entities are subject to strict compliance and regulatory oversight, including capital adequacy and operational conduct standards.
In addition to licensed professional trustees, Guernsey law permits the use of Private Trust Companies (PTCs) as trustees. A PTC is a corporate entity established solely to act as trustee of a specific trust or group of related trusts, typically created by or for the benefit of a single family. The use of a PTC allows the settlor or family members to retain a level of influence over the administration of the trust through directorships, board appointments, or participation in governance structures such as a family council.
PTCs in Guernsey are not required to be licensed by the GFSC if they meet specific exemption criteria—namely, that they do not offer trustee services to the public and act only for trusts connected to a particular family group. This exemption enables the family to maintain confidentiality and a high degree of administrative control while remaining within the bounds of legal and regulatory compliance. However, even where licensing is not required, a PTC must still adhere to anti-money laundering, counter-terrorist financing, and beneficial ownership disclosure obligations.
The creation of a PTC can be useful in jurisdictions such as Guernsey, where multi-generational planning and bespoke governance structures are often central to a family’s estate strategy. Through a PTC, families may design governance models that align with their values, such as including family representatives on the board or establishing investment committees with specific mandates.
Overall, Guernsey’s trust regime combines a well-developed legal infrastructure with regulatory flexibility, particularly in its accommodation of private structures like PTCs. The jurisdiction supports a wide range of trust types and administration options, offering legal certainty and continuity across generations. Importantly, while offering confidentiality, Guernsey’s trust structures operate within a strong regulatory framework that meets international standards for transparency and integrity.
Legal *
Country code – GG
Legal basis – Mixed (Customary, French civil and Common)
Legal framework – Trusts (Guernsey) Law
Formal name – Trust
Settlor – The settlor is the person who establishes and whose assets are put into the trust. The settlor may also be the beneficiary of those assets and may reserve certain control powers. They may not be protected from a subsequent bankruptcy after assets are gifted to the trust
Trustee – Trustees are natural or legal persons who hold the title to the assets and manage the trust, but they cannot benefit from it.
The Trustee may be at least two individuals or a body corporate, who must perform certain obligations set out in the Law and trust document.
There is no restriction on the residency of the trustees, but they should be licensed by the Guernsey Financial Services Commission.
Custodian trustees are not permitted.
Beneficiaries – Beneficiaries are those who get benefit from the trust. Beneficiaries may be individuals or corporate bodies.
There are specific provisions to prevent beneficiaries from draining the trust of its assets and spending in a thrifty way. Trusts in Guernsey allows avoiding both probate and forced heirship rules.
Protector – The settlor may appoint a Protector with certain powers in relation to the trust, including the power to appoint and remove Trustees, the power to add or remove Beneficiaries and the power to terminate the trust. Appointment of a protector is not mandatory.
A protector can be an individual or corporate body.
Trust deed – The document that sets out the terms upon which the trustee shall manage the trust.
Disclosure - The trust instrument is a private document and does not have to be filed with any public body in Guernsey.
Protection from foreign judgments – The Trusts Law does not provide provisions to ignore and not enforce judgments. The Hague Convention on Trusts does not apply in Guernsey.
Protection from creditors – The Statute of Elizabeth on Trusts does not apply in Guernsey, so transfers by the settlor to the trust may not be set aside if the settlor transferred the property before the debt arose. The creditor must prove the fraudulent transfer of assets to the trust, which is clearly defined by the law. Creditors’ claims may be brought jointly. If a fraudulent transfer is proven, the trust may be declared invalid.
Protection for immigrant trusts – Trusts that migrate from other jurisdictions do not benefit from retroactive protection.
Community property – Community properties transferred to a Guernsey trust may not retain its community property character.
Exclusion of foreign law - There are no exclusions in the legislation to be able to exclude foreign law.
Choice of law – The choice of law of Guernsey to govern the trust or a particular aspect of that trust, is valid, effective and conclusive regardless of any other circumstances.
Duration - A Guernsey trust can be of unlimited duration.
Compliance – There is no requirement for trusts in Guernsey to be registered. A trustee shall keep accurate accounts and records of the trustee’s trusteeship.
There are no reporting requirements for a trust in Guernsey, provided that all beneficiaries are residents outside Guernsey.
- Settlor as a beneficiary *
- Bankruptcy protection * *
- Ignore foreign judgements * *
- Hague convention on trusts * *
- Choice of law is binding * *
- Protection from immigrant trusts * *
- Community property provisions * *
- Custodian trustee permitted * *
- Rule against perpetuities (years) * *
- No Specific exclusion of foreign law *
- Yes Settlor can retain control *
Protection of Settlor *
Protection from foreign judgements *
- Avoidance of forced heirship * *
- Spendthrift provisions * *
- Exclusion of Statute of Elizabeth laws * *
- Trust invalid if transfer fraudulent *
- Creditor must prove fraudulent transfer * *
- Clear definition of fraudulent transfers * *
- Separation of creditor claims * *
- Statutory limitation on fraudulent transfer * *
Protection of Beneficiary *
Transfers *
Taxes *
A trust established in Guernsey may not be subject to local taxes applicable to the assets and income of the trust, provided that no residents of Guernsey benefit from the trust and no physical assets are located there.
It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.
You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in Guernsey, transfer assets to it and receive profits from said assets.
- Offshore Income Tax Exemption * *
- Offshore capital gains tax exemption * *
- Offshore dividends tax exemption * *
- CFC Rules * *
- Thin Capitalisation Rules * *
- Patent Box * *
- Tax Incentives & Credits * *
- Property Tax * *
- Wealth tax * *
- Estate inheritance tax * *
- Transfer tax * *
- Capital duties * *
- - Offshore Income Tax Rate *
- - Corporate Tax Rate *
- 0% Capital Gains Tax Rate *
- 0% Dividends Received *
- 0% Dividends Withholding Tax Rate *
- 0% Interests Withholding Tax Rate *
- 0% Royalties Withholding Tax Rate *
- 2 Losses carryback (years) *
- Indefinitely Losses carryforward (years) *
- 6.60% Social Security Employee *
- 0.00% Social Security Employer *
- 20% Personal Income Tax Rate *
- 0% VAT Rate *
- 0 Tax Treaties *
Country details *
The Bailiwick of Guernsey is a dependency of the British Crown located in the English Channel, specifically to the west of the coasts of Normandy, France.
The territory comprises the island of Guernsey (which forms the largest part) and its neighboring islands Alderney (2400 inhabitants), Sark (610 inhabitants) and Herm (60 inhabitants), as well as other very small islands such as Jethou, Brecqhou, Burhou, Lihou, and other islets.
Guernsey is part of the Channel Islands archipelago together with the Jersey Bailiwick. Although his defense is the responsibility of the United Kingdom the bailiwick is not part of it, but a possession of the British Crown.
Its population is about 65,000 inhabitants, of which 17,000 live in its capital, Saint Peter Port.
The native population has as its mother tongue French, more exactly a subdialect of the Norman dialect. However, the most widely used language today is English.
Its official currencies are the Guernsey Pound (GGP)) and the Pound sterling (GBP).
The head of state is the British Queen Elizabeth II of the United Kingdom represented by the lieutenant governor.
The Guernsey Parliament officially called the Deliberative States and chaired by the Bailiff, are composed of 45 deputies, elected in districts of one or more representatives every four years. There are also two representatives of Alderney, an independent dependency of the Bailiwick, but Sark does not send any representative. There are also two non-elected members, both appointed by the monarch as legal officers and without a vote.
About a third part of its gross national product is supported by financial services (banking, fiduciary, captive insurance, and fund management). Other traditional sources of income are agriculture, tourism, optical, engineering and horticulture, mainly tomatoes and cut flowers. Major imports include coal, gas, oil, electricity, machinery, and equipment.