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
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
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.
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