Guernsey: High Standards Pave The Way For Sector Development

Last Updated: 4 February 2014
Article by Fiona Le Poidevin

Most Read Contributor in Guernsey, September 2016

Fiona Le Poidevin, chief executive of Guernsey Finance, looks at the issues affecting the private client industry and how Guernsey is responding.

On Monday 9 September, UK Prime Minister David Cameron told a sitting of the House of Commons: "I do not think it is fair any longer to refer to any of the Overseas Territories or Crown Dependencies as tax havens. They have taken action to make sure that they have fair and open tax systems. It is very important that our focus should now shift to those territories and countries that really are tax havens. The Crown Dependencies and Overseas Territories, which matter so much – quite rightly – to the British people and members have taken the necessary action and should get the backing for it."

These comments follow two letters from the Prime Minister earlier in 2013 when he wrote to the leaders of the Crown Dependencies and Offshore Territories and recognised their right to be "lower tax jurisdictions"; and personally wrote to Guernsey's Chief Minister, Peter Harwood, to praise the island's leadership in meeting international standards of transparency and exchange of information for tax purposes. Now, you might expect us to be particularly pleased with this series of comments and in particular, the reference that the island should no longer be considered a tax haven. But, it is our belief that the tax haven label has been unfairly applied to Guernsey for quite some time.

High standards

For example, at the summer G8 meeting in Northern Ireland, great weight was given to the declaration that there was agreement to 'National Action Plans' regarding beneficial ownership when in fact Guernsey has had equivalent standards in place since 2000. In addition, while some jurisdictions are only now moving towards automatic exchange of information, it is something Guernsey has embraced since 2011 under measures equivalent to the EU Savings Tax Directive.

The Island has also signed an Inter-Governmental Agreement with the UK which enhances the automatic tax information exchange provisions already in place between the two, and is similar to the Model I type agreement Guernsey signed in December with the US relating to the Foreign Account Tax Compliance Act (FATCA).

Guernsey also meets the European Commission's criteria for what is not a tax haven. It says that a third country cannot be considered a tax haven if it: firstly, implements the international standard for transparency and exchange of information; and also secondly, does not operate tax measures which are considered harmful in the areas of business tax. Guernsey meets both these criteria and therefore, is clearly not a tax haven in the view of the European Commission. Likewise, we were among the first set of jurisdictions to be placed on the OECD 'whitelist' in 2009 and subsequent Global Forum reports have continued to recognise the island as within the top tier of jurisdictions meeting international tax standards and thereby helping to protect global stability.

We have demonstrated this by the signing of 46 Tax Information Exchange Agreements (TIEAs) and 20 full and partial Double Taxation Arrangements (DTAs). In 2011 the IMF reported Guernsey as being compliant or largely compliant with 47 out of 49 of the Financial Action Task Force (FATF) recommendations on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) - the highest standard of any jurisdiction so far assessed, including the UK and the US as well as our competitor territories.

This is just a snapshot of some of the measures Guernsey has met in recent years. Clients and practitioners respect Guernsey as a place to do business and gain comfort in the fact that we are not secret but transparent, yet we also retain confidentiality for clients. This positioning has provided Guernsey with a secure platform to further expand the range of wealth management services it offers.

Image rights

One of the most notable developments came at the end of 2012 when Guernsey became the first jurisdiction globally to recognise image rights in law and provide them with a register. Traditionally, the main way to protect the IP in a personality has been through trade mark rights.

While there are other related IP rights that come into play, such as copyright and design rights, they only go so far in protecting the rights of the modern celebrity, whose interests are more wide ranging than have historically been the case. Guernsey's image rights law has opened up a new chapter in asset protection and exploitation management. While initial take-up has been steady, if not spectacular, the register achieved its biggest coup in October when Manuel Pellegrini, manager of English Premier League side Manchester City, registered his image rights. Other big names on the island's image rights register include British tennis star Heather Watson, UK model Megan Williams and international DJs Tiesto and Afrojack.

The image rights offering can also be utilised by corporate entities, with a number already registered, but it is expected to be particularly attractive to high-profile individuals. Placing image rights on a statutory footing provides definition around the person as the individual and the brand and can assist with valuation. In doing so, this creates both certainty for tax matters and also a commodity which can be both protected and exploited.


The start of 2013 saw further evolution of the island's private client offering with the introduction of the Guernsey Foundation. It provides local practitioners with another tool – in addition to the existing wide range of structures available, such as trusts and companies – for meeting client needs and in particular, asset protection, estate and succession management, philanthropy and wealth planning for globally mobile individuals and families.

Although the foundation has been available in other jurisdictions for some time, our model is quite different from others. It was tailored to meet the wishes of international private client advisers, who wanted the opportunity to use a foundation solution from a well regulated and respected jurisdiction, such as Guernsey which, although renowned for administering trusts, has built up considerable infrastructure and expertise in managing the wealth of private clients. The introduction of foundations locally provides clients with the ability to use the island even if they were previously uncomfortable with the trust structure.

The common-law roots of the trust mean it is familiar to those in the Anglo-Saxon world of the UK, US and Canada, for example, but less well understood in civil law jurisdictions in continental Europe and some of the 'emerging' markets which are the major sources of new and rapidly growing private and corporate wealth. Indeed, Guernsey has invested significant time and resources building relationships and brand awareness in these markets, notably in Asia where a growing number of Guernsey-based firms, particularly in the fiduciary sector, have established operations and increased their visibility in the region.

Family office

Another noticeable trend in recent years is the growing popularity of family office services provided through Guernsey. Increasingly globalised family interests have created the need for an accessible central hub co-ordinating, structuring and managing family assets and affairs, which can range from anything to do with arranging pet care, household staff and educational investment to philanthropic coordination, family governance and financial investment. Guernsey's 40 minute flight time to London, coupled with its convenient time zone, ensures that principals have easy access to their offices.

In addition, they know through Guernsey that they can utilise a variety of different structures and vehicles, such as Private Trust Companies (PTC), the Guernsey pioneered Protected Cell Company (PCC) or the recently introduced Guernsey Foundation amongst others, to ensure that assets and investment strategies are managed in a coherent manner.

The complexity of many family structures requires first class service providers, something Guernsey with 50 years' experience of servicing private clients and more than 150 licensed fiduciary service providers has in abundance. These are then supported by a network of professional services, such as global private banks and multi-jurisdictional law and accountancy firms which have expertise in dealing with the varied nature of private wealth management. Furthermore, many of the world's largest banking institutions are represented on the island.


Despite the Prime Minister's declarations in the House of Commons earlier this year, I am fully aware that Guernsey is likely to continue to be questioned by some as to the make-up of our financial services industry. Nevertheless, it remains an exciting time for our us with a number of new services available and we will be doing everything we can to ensure that the island remains attractive to prospective clients as a leading international private wealth management centre for many years to come.

Originally published in Private Client Practitioner's 2014 Guernsey Special Review, January 2014.

For more information about Guernsey's finance industry please visit

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.

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