We are an independent global specialist in the administration of traditional funds and alternative assets with a particular specialism in private equity and real estate.
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We can support your fund through its entire lifecycle and the growth of your business. We provide a comprehensive range of private equity solutions delivered from key onshore and offshore jurisdictions to leading companies investing in a broad range of industries.
Our Fund Services Division has a proven track record in providing a broad range of fund services where the asset class is real estate.
JTC’s strong track record in operating at the leading edge of alternative asset classes continues with its innovative and market-leading capabilities in the emerging sphere of cryptocurrencies.
JTC Fund Services can offer a fully AIFMD-compliant ManCo service. The activities of the ManCo include providing a portfolio management, risk management and oversight function.
We have a deep understanding of listing funds on internationally recognised stock exchanges and the ongoing regulatory requirements of administering listed funds.
As a truly independent fund administrator you can be reassured that your fund administration requirements are entrusted to people that care about your investment structures.
We will project manage your application and guide you through the process and co-ordinate the various advisors to assist with the fund launch and strive to ensure everything happens within the expected timescales.
We offer a transparent, proactively managed range of cash management, foreign exchange and lending services, supported by a dedicated team of experienced professionals.
JTC Corporate Services provides a comprehensive range of corporate and fund services from key onshore and offshore jurisdictions to leading companies in their field of expertise.
We provide corporate finance services for corporate and institutional clients including debt capital solutions, treasury and escrow services.
We provide employee benefit structures, administration services to ensure employees get maximum value from the plans that organisations put in place.
Global experience in this dynamic asset class, spanning our corporate, funds and private client divisions.
JTC Fiduciary Services specialises in protecting and nurturing your private capital in real estate, financial and non-financial assets across countries and generations.
Superior service delivered by industry leading experts for private individuals, entrepreneurs and their families.
We provide a tailored range of private office solutions that work effectively for each family, from generation to generation.
We are able to partner with corporate and institutional wealth providers to complement their service offering by providing trust and company services.
In an age of truly international mobility, we also offer market-leading citizenship-and-residency-by-investment solutions via a strategic alliance with market-leading provider Henley & Partners.
JTC has extensive cross-jurisdictional experience and expertise in working with institutional and private clients in Africa, Americas, Asia, Australasia, Caribbean, Channel Islands, Europe, Middle East, Russia & CIS and the United Kingdom.
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26 Jun 2017
Date: 26 October 2017
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18 May 2017
We are JTC, an independent, award-winning provider of fund, corporate and fiduciary services to institutional and private clients.
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JTC is committed to the policy of equal treatment of all its employees and requires all employees of whatever grade or authority, to abide by and aspire to this general principle.
We have a highly qualified and multilingual workforce. In 1998 we created the JTC Employee Benefit Trust, which turned our employees into stakeholders. This enables us to attract and retain the best people, whilst keeping them absolutely motivated and dedicated to our clients.
In 2014 this belief in share ownership was embedded further into the JTC culture with the equity for all scheme, allowing all permanent members of staff the opportunity to invest in the future of their company. That helps explain why they are so dedicated and care so much about their client’s work.
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A Guernsey trust separates the legal title, or ownership, of property from the right to benefit from that property. It involves a person (settlor) transferring property (trust fund) to another (trustee) to hold for the benefit of another person/s (beneficiary/beneficiaries) or purpose.
The actual formation of a Guernsey trust requires simply the execution of a trust deed by the parties and the receipt by the trustees of some property, which is often for convenience a nominal cash sum, upon which the trust can operate. Before this occurs, however, there will be additional matters to consider.
The intending settlor will wish to discuss the form of trust most suited to his requirements. A trust can be established during an individual’s lifetime (inter vivos trust) or upon their death under the terms of their will (testamentary trust). Nowadays, although a trust can still be established orally or by conduct, most trusts are formally established in a written instrument.
The trust deed is a legally drafted document that embodies the agreement wherein legal title in real property is transferred to a trustee, which holds in benefit for the beneficiaries of the trust.
Letter of wishes
A letter of wishes is a non-binding indication by the settlor of the manner in which he/she wishes the trustees to exercise their discretion in relation to a discretionary trust.
The trust fund means simply the assets held by the trustee. Generally speaking, assets can be added to a trust fund at any time, including by a person who was not the original settlor. Any type of asset can be held as part of the trust fund of a Guernsey trust. Often, however, the ‘real’ assets will be held in a private investment company the shares of which are held by the trustee and form the trust fund.
The trustee may be an individual or a company. In Guernsey there is no requirement for a corporate trustee to have particular status as a ‘trust corporation’. A settlor must choose a trustee with care, to ensure as far as possible that the trustee will carry out the terms of the trust competently. A Guernsey trust must have at least two trustees unless only one trustee was originally appointed or a corporate trustee resident in Guernsey is acting or the terms of the trust provide otherwise. Where there is more than one trustee, they must act unanimously unless majority decisions are permitted by the terms of the trust.
As noted above, this is the person who causes the trust to be established by transferring the initial assets of the trust fund to the trustee. He/she, or others, may subsequently transfer further assets. Usually, but not necessarily, the transfer is by way of absolute gift. Unless the trust deed reserves powers to the settlor, he/she has no subsequent right to interfere in the running of the trust or to enforce the terms of the trust - these rights are vested solely in the beneficiaries and the courts. A settlor may, however, be a beneficiary of a trust.
Settlor reserved powers
Under Guernsey law it is possible for a settlor to reserve certain powers within the trust deed. These can be reasonably wide ranging, and settlors need to be mindful of reserving too many powers in case it is deemed as if they are controlling the trustees and the trust becomes a sham. However, common powers are:
There will usually be named individual beneficiaries and/or a ‘class’ of beneficiaries who are eligible to benefit from a trust. The nature of their interest will depend upon the nature of the trust and its terms. The beneficiaries are however entitled to expect the trustee to administer the trust for their benefit in accordance with the terms of the trust and the duties of trustees laid down by the trust law.
For this reason, beneficiaries are entitled to copies of certain trust documents (including the trust deed) and to the accounts of the trust unless the trust deed provides otherwise (in which case they will have right to apply to the Royal Court of Guernsey for such information to be disclosed to them).
The protector is a person who can act as a control/sense check upon the way in which the trustees can exercise certain powers. Most commonly, a protector is given a power of veto over the exercise of particular powers contained in the trust deed. A protector could also be given its own particular powers, such as the power to appoint new trustees. As such, the protector is not a trustee, but he/she may have duties of a fiduciary nature. A protector is often a trusted personal adviser of the settlor, and this is one means by which a settlor may retain some assurance that a trust will be administered as he/she had intended. It is possible for the settlor to appoint himself as protector to the trust, providing he/she is not a beneficiary of the trust.
A Guernsey trust may exist for an indefinite period or for any stated fixed period, and if the terms of the trust allow, income may be accumulated throughout that period.
Probably the most widely used type of offshore trust. The trustees are under a duty to use their discretion to apply the income and capital of the trust assets for the benefit of a class of beneficiaries. The trustees decide which beneficiaries benefit, and what proportion of the trust fund they receive. Whilst the trustees have discretion, they are subject to obligations as to how they exercise it and must do so only for the benefit of the beneficiaries. The beneficiaries have no right to either income or capital of the trust, but merely a hope that the trustees will exercise their discretion for their benefit. The settlor can give guidance (usually through a letter of wishes) to the trustees as to how they would like the trustees to exercise their discretion, but ultimately cannot control them.
Life interest or interest in possession trust
One or more specified beneficiaries (life tenant(s)) have a right to receive a fixed share of trust income for a specified period (usually life). Capital is held either on fixed interest trusts or at the discretion of the trustees for specified beneficiaries to benefit after the life tenant’s death.
A popular use of this trust is to grant the right to live in a property to a life tenant but stipulate that on the death of the life tenant the property falls into the estate of another beneficiary.
A trust set up for charitable purposes, which commonly enjoy certain tax benefits.
Non-charitable purpose trust
These trusts are neither for individuals nor for charities, but instead used for a specific purpose. For example, holding shares in a company. Under Guernsey law, these trusts are only valid if in writing and the trust instrument nominates an enforcer who is responsible for ensuring that the trustees look after the trust fund and the purposes of the trust appropriately. Certain jurisdictions including England do not have the same wide concept.
Protective/asset protection trust
A sub-species of life interest trusts under which the income rights of a socially or financially vulnerable beneficiary, such as a bankrupt individual, automatically terminate if the beneficiary attempts to dispose of the rights, at which point the terms of the trust covering that income become discretionary, leaving the beneficiary with no defined right. These can be particularly useful, for example, as a way of preventing family assets dissipating in the event of a divorce.
Employee benefit trust and pension trust
A trust created to motivate employees by providing performance related benefits settled in trust by an employer or to house pensions funds (individual and occupational) for the benefit of their employees.
Private trust company (PTC)
A Guernsey PTC is a privately owned company that is incorporated specifically to act as trustee of a single trust or group of family trusts and is not permitted to offer trustee services to the public generally. PTC structures offer an opportunity for ultra-high-net-worth individuals to establish and manage, often with the assistance of their trusted advisors, their own trust company. Please see our separate briefing note on PTCs which expands in detail as to how these structures operate.
Trusts can be extremely useful structures for dealing with a variety of issues including:
Assets are held in the name of the trustees, thereby keeping the identity and interests of the beneficiaries confidential.
Subject to certain forced heirship rules, trusts enable clients to determine with greater flexibility exactly how their estate is distributed. For example, trusts are often established in wills to allow a second spouse to benefit from a property while alive, but ensuring that the children of a previous marriage receive the estate when the spouse dies.
The deceased settlor’s assets are legally held by trustees and so do not form part of their estate on death. Probate, with its associated difficulties and costs, is therefore avoided.
Asset consolidation and management and asset protection
A way of placing worldwide assets in one holding vehicle to simplify asset management and centralise financial reporting. In addition to establishing holding structures for wealth protection, growth and transition, a family office can be a tool to implement broader succession, leadership and governance plans. It may also be used to protect assets from claims of future creditors to the extent permitted by law.
May be used to reduce tax liabilities in some circumstances. For example, since assets settled in trust do not form part of the settlor’s estate if settled within certain time constraints, inheritance taxes can be reduced.
Trustees looking after assets until children are mature enough to deal wisely with their finances protects children from having control over too much money too early, whilst the trustees can, if the appropriate trust is drafted, direct money for their education, maintenance and other needs.
Taxation of trusts in Guernsey
Guernsey income tax is the only local tax that may be applicable to trust structures. Trustees may be Guernsey income tax payers and may be obliged to file tax returns when resident in Guernsey. To establish if Guernsey income is payable, one must first distinguish between income of the trust and income from the trust.
Income of the trust
Only where the settlor is liable for Guernsey income tax and they and/or their spouse can or may benefit under the trust or in any circumstances control the trust property will the settlor be liable to pay tax on the entire income arising to the trust.
Income from the trust
The position depends on the tax position of the beneficiaries.
Where the settlor and beneficiaries are non-Guernsey resident, Guernsey tax is only payable on Guernsey source income (other than bank interest, although this may be subject to a retention tax under the EU Savings Tax Directive).
Where the settlor is Guernsey resident but excluded, Guernsey tax is only payable in the hands of Guernsey resident trustees - unless income is paid from a non-Guernsey company. No tax is payable where the trustees are not Guernsey resident.
Where the beneficiaries are Guernsey resident, Guernsey tax is payable by them on what they receive, and the trustees may be taxed on that amount on the beneficiary’s behalf.
This publication is intended to provide an overview of the subject matter and is not comprehensive in nature or to be construed as legal or tax advice. We recommend that clients seek professional advice on any particular matter.
Managing Director - Guernsey
The entities within JTC Group, carrying on the regulated business of JTC Group, are duly regulated as appropriate by the British Virgin Islands Financial Services Commission; the Cayman Islands Monetary Authority; the Guernsey Financial Services Commission; the Jersey Financial Services Commission; the Commission de Surveillance du Secteur Financier and the Ordre des Experts-Comptables in Luxembourg; the Malta Financial Services Authority; the Financial Services Commission in Mauritius; the South African Financial Services Board as an authorised financial services provider; is chartered and regulated to provide trust services by the South Dakota Division of Banking in South Dakota (USA); as a member of l’Association Romande des Intermédiaires Financiers in Switzerland and is authorised and regulated by the Financial Conduct Authority in the UK.
L’Association Romande des Intermédiaires Financiers (ARIF) is a self-regulated agency approved by the Swiss Financial Market Supervisory Authority (FINMA) for the supervision of financial intermediaries referred to in Article 2 para. 3 of the Swiss Federal Act concerning the fight against money laundering and terrorist financing in the financial sector (LBA). ARIF is also recognised by FINMA as a professional organisation for the enactment of rules of conduct relating to the exercise of the profession of independent asset managers within the meaning of the Collective Investment Schemes Act (CISA).
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