Trusts

Trusts are a highly flexible and a well proven method of confidential succession, wealth and inheritance planning. Working with your preferred advisors, Artemis can help construct various types of Trust carefully tailored to suit both private and corporate client requirements. Whilst we deal primarily with Guernsey law trusts, Artemis has experience of multiple trust law jurisdictions, including the US, Jersey and the UK.

There are two main types of trusts

A discretionary trust allows for the distribution of assets to all or some of a class of beneficiaries at the sole discretion of the trustee.

This type of trust is a particularly flexible arrangement, granting the trustee wide powers over the distribution of both capital and income in accordance with any specific parameters set forth within the trust deed itself.

The trustee might be guided by an associated letter of wishes, provided by the settlor, suggesting the way in which the fund might be utilised.

A fixed interest trust differs from its discretionary alternative, inasmuch as it identifies the specific beneficiaries who are to benefit from the trust fund and, in turn, stipulates exactly what benefit should arise and when.

By way of an example, the most common form of a fixed interest trust would be a 'life interest trust', whereby income generated by the trust assets would belong to a certain beneficiary or beneficiaries during their lifetime by right, and thereafter the capital assets of the trust would be dealt with as directed in the trust deed – perhaps distributed in part or in their entirety to another group of beneficiaries, or maybe even held upon further trusts to provide a fund for future generations.

The Purpose of Trusts

 

  • To dispose of the beneficial ownership of assets prior to taking up residence or becoming domiciled in a country with high gift, capital or income taxes, political instability or forced heirship.
  • To preserve confidentiality of asset holding and to protect, inter alia, legitimate family wealth and structuring.
  • To provide a pension fund for the benefit of employees of a business.
  • To motivate employees by providing benefits under terms of an employment benefit trust.
  • To facilitate the creation of a collective investment scheme, for either public or private use.
  • The structured mitigation or deferral of taxation.

"Whilst we deal primarily with Guernsey Law Trusts, Artemis has experience of multiple Trust Law jurisdictions, including the US, Jersey and the UK."


The Trustee

 

In Guernsey, a trust requires two individual trustees unless a corporate trustee is appointed. The utilisation of a Guernsey corporate trustee is particularly helpful in facilitating the professional daily administration of a trust, and greatly assists in ensuring the residency of the trust for tax purposes. Artemis Trustees Limited acts as a corporate trustee on the Island, and is licensed by the Guernsey Financial Services Commission. Our individual directors are also able to act as professional personal trustees where required.

Confidentiality

 

Under the terms of trust legislation in Guernsey, the public filing of trust deeds and trust accounts is not required. There is also no necessity for trusts to be registered, thus confidentiality is assured; however Guernsey has also developed a very effective legal and financial framework surrounding this successful trust and company legislation, and remains internationally recognised as a highly transparent and highly regulated jurisdiction, setting the global standard for anti-money-laundering and due diligence procedures.

Taxation

 

Guernsey-based structures can offer a wide array of advantages from a personal and a corporate tax perspective. A Guernsey trust, for example, with a settlor and beneficiaries resident outside of the Island will not have any local tax liability on income arising outside of the Island, nor will there be any liability to local income tax on bank deposit interest arising within the Island. Also of note is the fact that Guernsey does not apply any taxes on capital gains.