Creating an offshore trust in Guernsey
Below is an analysis of trusts and foundations in Guernsey. The requirements for Guernsey trusts and the advantages of Guernsey as a jurisdiction for offshore trusts and foundations have been carefully analyzed. Guernsey trusts provide for both the trustor and the beneficiary. Although in various jurisdictions there are specific requirements and obligations that must be met when creating an offshore trust, the trust structure is the same as in the whole world. Basically, a Guernsey trust implies the need for a founder who transfers or contributes assets to a trust. A trustee is a person who is responsible for managing assets in the interests of a person or group of persons called beneficiaries. Trustees must be adults in their right mind. Finally, the guarantor supervises the operation of the trust to ensure compliance with the Declaration of Trust and satisfactory management of the trust.
Why create an offshore trust in Guernsey?
The legislative framework in Guernsey is well adapted to the activities of trusts, it was this jurisdiction that was one of the first to declare that trusts must be regulated. It is clear that it was here, in one of the world centers of state management, that 140 trusts were already created, and many people choose this stable and reliable jurisdiction, taking advantage of its advantages and opportunities that are opening up in this country.
The new legislation of Guernsey on trusts came into force in March 2008, and as a result led to an increase in the “capacities” of trusts created by the founders of trust management and, also, by trusts of a non-charitable nature. Guernsey Trusts legislation is modern and flexible, therefore it contributes to the growth of trusts. All this allows founders to reserve powers or transfer some of them to third parties. Such powers include the allocation of certain assets to nominated beneficiaries, the appointment of directors to subsidiaries, and the ability to replace the trustee or class of beneficiaries.
Being an offshore jurisdiction, Guernsey has enjoyed a reputation as an economy specializing in trusts, with highly professional regulated trusts operating here for more than 150 years.
What is an offshore trust in Guernsey?
In Guernsey trusts, the asset owner (the founder of trust management) transfers the legal ownership of such assets to another person (trustee) so that the latter will manage these assets in accordance with the trust declaration.
The most popular discretionary trust in Guernsey. The minimum amount for the establishment of a trust is, on average, 1 million, which is sufficient to justify the administrative costs and costs of creating a trust.
The appointment of an offshore trust in Guernsey
The main purpose of an offshore trust in Guernsey is to effectively and easily create and organize your financial activities and, potentially, provide future generations, or simply protect your personal fortune from an unforeseen crisis, for example, if there is an unstable political and financial situation in the country, then this can adversely affect your condition if it is not protected in a trust.
Benefits of a Guernsey Trust
– Avoidance of the right to an obligatory share in the hereditary mass, while other jurisdictions (for example, Italy, France, Spain), where such a provision applies, may stipulate how and to whom to distribute your assets).
– In an international trust in Guernsey, you can replace the Trustees of the Resident of Guernsey with Trustees by non-Guernsey residents, thereby changing the legislation on trusts. This is achieved by simply transferring the trust to another jurisdiction.
– Guernsey trust accounts do not need to be audited.
– Non-resident trustees have the right not to submit a tax return or trust accounts to the income tax administrator.
Creating an offshore fund in Guernsey
Creating an offshore fund is usually considered an effective asset protection tool, most often used by rich people and corporations. To create a foundation in Guernsey, board members, founder, guarantor and beneficiary are required. Unlike a trust, a foundation acquires the status of a legal entity (or an individual), since the foundation may have assets in its name, enter into agreements with third parties, and even act in court on its own behalf.
What is a foundation in Guernsey?
A foundation in Guernsey is being created, and its purpose is stated in the statute. Board members will manage the fund and be accountable under the statute. Funds in Guernsey are not limited in their right to accept any kind of assets and any amounts.
The tax system of Guernsey funds is similar to the tax system of Guernsey trusts.
What is the purpose of creating a fund in Guernsey?
The Guernsey Foundation provides all the benefits of a trust, but at the same time provides greater flexibility and clarity in work. The founder is allowed to maintain control over the fund, and there are no members or shareholders of the fund.
Benefits of a Guernsey Foundation
– Tax benefits in terms of avoiding double taxation of capital gains
– Efficient and structured distribution management system and state management
– Inheritance tax reduction
– Payment of reasonable compensation, which allows you to offset the costs of providing services to the fund
– Gratuitous contributions to the fund are excluded from taxation.