This client briefing provides a brief overview of trusts in The British Virgin Islands (BVI), Cayman, Guernsey, Jersey and New Zealand. For further information, please contact those listed in this briefing.


The British Virgins Islands is a British Overseas Territory with a strong constitutional relationship with the UK. It is responsible for its own internal self-government, most notably in relation to taxation. The British Virgin Islands has an independent legal system based largely on that of the UK, with most law derived from English common law, and the final appeal remains to the English Privy Council. The economy is one of the most prosperous in the Caribbean. The British Virgin Islands has developed into a well-established jurisdiction for financial services as a result of the government's commitment to business.

With the introduction of the VISTA legislation, it has been said by leading practitioners that the British Virgin Islands has the most modern and coherent trust legislation globally. Policies and legislation have been developed in close partnership with the private sector, and as a result responds well to the needs of business and demonstrates a sophisticated and cutting edge approach.

British Virgin Island trust law is based predominantly on English trust law, but has developed beyond English law to permit purpose trusts, extend the perpetuity period and most notably to create the unique VISTA trust. Trusts in the British Virgin Islands are exempt from registration under the Registration and Records Act and trustees are exempt from any reporting and filing requirements, ensuring a high degree of confidentiality.

Trusts are protected by the requirement that companies carrying on trust company business must obtain a licence and conform to various requirements (with the exception of private trust companies which meet the criteria in the relevant regulations).

Cayman Islands

The Cayman Islands is a group of three islands situated in the Western Caribbean, 500 miles and one hour flying time south of Miami, Florida. As a United Kingdom Overseas Territory with responsibility for its own internal affairs, the Cayman Islands is one of the world's most sophisticated offshore jurisdictions More than 80% of the world's largest banks have a presence in the jurisdiction. Political, social and economic stability, and a strong business infrastructure with experienced professionals, make the Cayman Islands a perfect choice for offshore business.

Cayman Islands law is derived from English common law and a close partnership between the government and private sector has enabled the Islands to enact modern, cutting-edge legislation, particularly in the area of trust law. Cayman trusts are widely used for estate planning, confidentiality, charitable works and asset protection and, in the commercial area, for unit trusts, employee benefit plans and special financing arrangements.

In Cayman innovative STAR Trust legislation;

  • allows trusts to be established for the promotion or advancement of impersonal objectives

  • the rights of beneficiaries to information and to take court proceedings may be excluded

  • perpetuity period (normally 150 years) can be excluded


Guernsey is a self-governing dependency of the British Crown and as such has complete autonomy in all matters of internal government, including financial regulation and taxation. Moreover Guernsey lies outside the European Union fiscal territory and most EU directives on financial services and company law do not have effect here. In these respects the Island enjoys significant advantages over onshore financial centres such as Luxembourg and Ireland.

Guernsey has a sophisticated legal system, derived in part from the customary laws of ancient Normandy but which has been strongly influenced by English common law in more modern times. The Judicial Committee of the Privy Council remains the Island's ultimate court of appeal.

The operation of Guernsey trusts is principally governed by a modern statute entitled the Trusts

(Guernsey) Law, 1989. This statute gives legislative force to some time-honoured traditions, such as the duty imposed on trustees (by Guernsey law alone) to act en bon pere de famille: that is to say, prudently as if they were administering their own family's wealth.

The Royal Court of Guernsey has an acknowledged proficiency in the law of trusts and exercises an extensive supervisory jurisdiction. The senior British barristers who sit in the Court of Appeal in Guernsey provide an additional level of expertise which may be lacking in less sophisticated jurisdictions.


Jersey is the largest of the Channel Islands comprising 45 square miles with a population of 88,000. Jersey is a self-governing British Crown Dependency but is not part of the United Kingdom. It has for centuries been responsible for its own domestic and fiscal affairs while the UK retains responsibility for the Island's defence and foreign relations. It is not a member of the European Union and is therefore not subject to EU Directives, save those relating to the free movement of goods.

A quarter of Jersey's working population works in the finance industry which accounts for nearly 60 per cent of GDP. The Island has one of the highest figures for GDP per capita in the world.

Jersey has a world class regime for trust and company business based on a sound legislative and regulatory framework. The sources of law in Jersey are customary law, legislation and judicial decisions. There is a strong local judiciary which draws upon the experience and expertise of senior British barristers. The final court of appeal for cases arising in Jersey is the Privy Council in London.

The Trusts (Jersey) Law, 1984 as amended, is widely regarded as the international standard for offshore trust legislation and has been adopted as the basis of the trust law of a number of other jurisdictions.

New Zealand

New Zealand is located in the South Pacific, in a time zone 12 hours ahead of Greenwich Mean Time. With a population approaching four million and a thriving and highly diversified economy, it is one of the leading nations of the Pacific rim region. It is a member of the British Commonwealth and the English monarch is the head of state – represented in New Zealand by a Governor General.

New Zealand is a common law jurisdiction (modelled on the English legal system) with a modern and comprehensive body of legislation and case law. The judiciary is independent of government. Foreign case law authorities are persuasive, but not binding on the New Zealand courts.

New Zealand has long recognised equitable principles and has modern and well developed trust legislation and case law. Indeed, the New Zealand courts have been recognised internationally as being notably progressive in their application of equitable and trust principles.

It could be said that New Zealand is an onshore jurisdiction (belonging to the OECD, the WTO and other international bodies), but with an offshore tax system for trustees and trusts. This can potentially allow access to the traditional advantages of an offshore trust structure to clients who have not previously been able to deal with offshore jurisdictions.

Key benefits of establishing a trust in Jersey,

Guernsey, the Cayman Islands and New Zealand include:

  • politically stable, and secure environments.

  • tax neutrality.

  • high regulatory standards including rigorous licensing requirements for professional trustees.

  • confidentiality.

  • no requirement for registration.

  • international standard of legal, accounting and investment services.

  • ability to reserve extensive powers.

  • specific exclusion of foreign forced heirship rules.

  • time zone choice.

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.