By Christopher McKenzie, Partner, O’Neal Webster (UK) LLP (October 2016)
This article considers why private trust companies are currently so popular, various structuring issues which those setting up private trust companies should take into consideration, and the private trust companies regulations which came into force in the British Virgin Islands (BVI) in August 2007 and which were amended in 2013.
Private trust companies (PTCs) have become increasingly popular offshore in the last 20–25 years. A PTC may be defined as a company which is incorporated with its main function being to act as the trustee of a specific trust or a number of ‘related’ trusts. It should be contrasted with a professional corporate trustee, bank, or financial institution which offers its services to the general public for a fee. In contrast, PTCs tend to be less regulated.
PTCs operate within the framework of general company law and trust law, but they may also be subject to regulatory requirements.
Clearly when setting up a PTC, one of the most basic points to consider is that the company’s memorandum (or constitution) must give it the power to act as trustee of the particular trust or trusts of the kind intended.
In addition, when structuring the company, it is always sensible to obtain advice from lawyers from the jurisdiction in which the company is incorporated, from where the trust is to be administered and from those from the jurisdiction the proper law of which is to govern the trust (or trusts). Tax advice on structuring issues should always be taken from qualified advisers in the relevant jurisdictions.
For example where trusts have the same settlor or one or more of their beneficiaries or objects of powers of appointment are the same.
For the complete article, read or download the PDF here.
Partner – BVI Trusts & Estates/Private Client
O’NEAL WEBSTER (UK) LLP
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London WC1B 5HJ
Tel: +44 (0)203 078 7295 (office)