Gibraltar: Trusts In Gibraltar

Last Updated: 16 March 2000
Trust is a legal entity which was devised under Common Law. The parties to the Trust are:-

  • THE SETTLOR - the person who initiates the Trust by gifting into the Trust a sum of money or other assets.
  • THE TRUSTEES - the legal owners and administrators of the Trust assets.
  • THE BENEFICIARIES - the persons who will benefit from the Trust.
The terms of the Trust are set out in a legal document - the Trust Deed which will define the trustees duties and responsibilities, and record the parties to the Trust at inception. In general, there is no requirement to file the Trust Deed or other documents on public record and providing no income arises or is paid to residents of the jurisdiction of administration, no tax is payable in the offshore centre.

There are two types of trust: those with interests in possession and those without. These are commonly known as Fixed Interest Trusts and Discretionary Trusts.

A FIXED INTEREST TRUST

This type of Trust defines the beneficiaries and their entitlement from the Trust, which may be the right to income during lifetime or until some predetermined event.

A DISCRETIONARY TRUST

This type of Trust empowers the trustees to pay income and appoint capital to beneficiaries at their discretion. However, it is customary for the settlor to address a letter of wishes to the trustees outlining his desires with regard to the accumulation and appointment of income and capital. A trust company acting as a trustee will normally take account of such wishes, although the letter has no binding power in law. It therefore must be remembered that a Trust is not merely a legal document but a relationship whereby an individual divests assets to people he can trust to administer them as he would like.

TRUSTEE SERVICES

It will be apparent that the choice of trustee is most important for both the Settlor and the beneficiaries; the Settlor is after all transferring the ownership of his assets to the Trustees who will become the registered owners of those assets and they will be responsible for the administration of both capital and income. Very often these matters will be at the sole discretion of the Trustees or as the Trust Deed may direct.

Whilst there are legal remedies available if a Trustee abuses his powers, or acts outside his authority, no client will be happy unless he has total trust and confidence in his appointed Trustees. In these circumstances an ideal Trustee will be a professional person, Trust Company or Bank which are staffed by professionals who will not risk losing either their reputation , livelihood or both.

ECS International Trustees (Gibraltar) Ltd has been established since 1982 with a background of professional staff with both an accountancy and legal background.

ECS International has established an enviable reputation in this area of professional service and is responsible for the affairs of many trust which control many types of assets for the beneficiaries under those Trusts.

It is worth noting that Trusts are not recognised under civil law in countries such as Spain and Portugal. Therefore the lack of legal recognition and anti tax avoidance legislation aimed at Trusts provides tax planning opportunities for foreign residents of such countries.

It is important to note that our company does not provide investment advice to its client trust but engages the services of professional investment advisers who are specifically qualified in these activities.

ASSET PROTECTION TRUSTS USING GIBRALTAR

Gibraltar satisfies the usual factors when considering a jurisdiction in which to establish an Asset Protection Trust namely:

  • politically and economically stable;
  • modern telecommunication facilities;
  • adequate legal, and accounting services;
  • regulated and supervised by a statutory Financial Services Commission;
  • favourable tax laws common law jurisdiction;
  • English language;
The Bankruptcy Amendment Ordinance 1990, amended the Bankruptcy Ordinance in relation to Asset Protection Trust by the introduction of section 42 A clause 1 of which states if:

  • under or by virtue of any disposition made in respect of property the same becomes settled property, and
  • the Settlor is an individual;
  • the Settlor is not insolvent at the date of the disposition;
  • does not become insolvent in consequence thereof, and
  • the disposition is registered in accordance with the requirements of any regulations;
  • such disposition shall not be voidable at the instance of or upon application by any creditor of the settlor.
In addition, clause 2 (a) states:

"notwithstanding the English Law (Application) Ordinance, the Fraudulent Conveyances Act 1571 shall not apply to any disposition to which this section applies."

The definition of "insolvent" in respect of a Settlor means any Settlor whose liabilities both actual and contingent or prospective exceed the value of his assets. Provided that no claim by his creditors shall be deemed to be a contingent or prospective liability of a Settlor who at the time of making the disposition does not have actual notice of such a claim or of the facts or circumstances which may render him liable to such a claim.

The objective factor is therefore the solvency of the settlor rather than the intent of the Settlor.

To take advantage of the Ordinance, the Settlement must be registered with the Financial Services Commission, for an initial fee of o225. The trustees must be regulated and licensed under the Financial Services Ordinance and their due diligence procedures approved by the Commissioner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.