Guernsey: Guernsey Guardian Case

Last Updated: 20 February 2009
Article by Patrick Palmer

Most Read Contributor in Guernsey, September 2018

Originally published in Private Client Practitioner, December 2008

In the recent case of Re X, Guernsey has clarified the circumstances in which the court will grant authority for a guardian to settle a patient's assets if they are unable, writes Patrick Palmer of Collas Day.

Guernsey does not have a statutory regime in relation to curatelle (guardianship) matters. Instead the law in this area, like many other, is based on Norman customary law, which has evolved throughout centuries of use.

Earlier this year, the Royal Court of Guernsey was asked to consider whether the assets of a patient under curatelle could be placed into a settlement in order to minimise the potential future inheritance tax liability. On dealing with this application the court had to consider a number of issues not least, whether they had sufficient jurisdiction and power in their supervisory role in curatelle matters to be able to give such direction to a guardian. To assist the court the H.M Procureur (whose role is similar to the Solicitor General in England) was appointed as amicus curiae to advise the court in matters of Guernsey law and an advocate from the law officers department was appointed to consider the interests of the patient.

At a preliminary hearing the court held as a matter of law that it had sufficient jurisdiction to be able to grant authority to a guardian to create a settlement of a patient's assets. The judge felt that this approach reflected the social changes in Guernsey and that it would help to ensure the development of Guernsey's customary laws in a way that was most appropriate for the island.

Following on from this earlier hearing the ordinary division of the Royal Court of Guernsey has now revisited this matter to consider the application for authority to place a patient's assets into two settlements in order to maximise the potential inheritance tax saving.

Facts of the case.

In accordance with Guernsey's guardianship procedures, a curateur (guardian) had been appointed in the Royal Court some years before the hearing to deal with the affairs of the patient, the court being satisfied on the basis of the medical evidence that the patient had become "unable to manage his own affairs for reasons of infirmity of mind." This appointment was made and has continued under the supervision of the Royal Court and the family council (which comprises three relatives or close friends).

The patient had been a very successful businessman and had amassed considerable wealth. It was understood, following witness evidence, that the patient had moved to Guernsey some years ago (where he has been domiciled since) in order to avoid paying UK capital gains tax after selling a business for a substantial sum in the late 1980s. His former wife (whom he remains on good terms with) and his two sons continue to live in the UK, all of whom were beneficiaries under the patient's will and therefore subject to UK inheritance tax laws.

Unfortunately the patient now suffers from a degenerative disease of the brain which has caused his memory to become increasingly impaired. The H.M. Procureur confirmed that the patient would not recover, even temporarily, and therefore would not be able to manage his affairs in the future. This view was also supported by medical reports and correspondence between medical professionals.

A reputable firm of chartered accountants had prepared a report in 2007 in relation to the patient's assets. The report recommended that from a taxation perspective, the patient, acting by his guardian, should settle his assets into a discretionary trust as this could result in substantial inheritance tax savings for future generations of the patient's family.

The content of the report and the subsequent application made by the guardian were supported by the members of the family council. In addition, Counsel for the Patient, subject to certain reservations, supported the application.

The evidence all indicated that the patient was generous, both financially and otherwise, to his family. Further to this, he had previously demonstrated a determination to pay as little UK tax as necessary evidenced by, amongst other things, moving to Guernsey to avoid capital gains tax.

The evidence also demonstrated that the patient had previously sought tax advice from the same chartered accounts who had prepared the report for this matter. When he had previously sought such advice the patient had accepted and followed it to the extent that he had placed the majority of his assets into a discretionary settlement many years earlier, although that settlement had since been wound up.

It must be noted that the patient had a valid will, which was made in Guernsey while he still had the mental capacity to do so. In his will he had left considerable legacies to his two sons and to his former wife, amongst others (legacies which may have conflicted with Guernsey's forced heirship rules depending on the value of his estate at the date of his death).


In summing up, the Lieutenant Bailiff gave a number of directions to the Jurats (the Guernsey equivalent of a non-stipendiary magistrate) namely that:

  • They could, if they wished, take into account the witness evidence regarding the patient
  • They should consider whether the patient would make the settlements if he were to briefly recover from his illness, receive all of the competent legal, accountancy and tax advice, and then relapse into his illness.
  • They should consider the evidence as to the Patient's reasons for moving to Guernsey including whether, as suggested, he did so for tax efficiency purposes. They should also question how they believe that patient would have reacted to a scheme that could save a considerable amount of money for his family.
  • As a fallback, they may consider what a reasonable and prudent man would do if he were in the patient's position.

The proposed settlements would transfer the patient's assets into two trusts, of which the patient would become a life tenant. This would clearly place the patient's assets outside of the direct control of the curateur and would beside appear to hold no additional direct benefit for the patient. However, counsel argued that the proposed settlements were in fact in the patient's best interests in the widest sense, including what were described as his emotional and health interests.

It appears highly likely from the facts of the case and the detailed reasons for the decision that, had the patient had the capacity to do so, he would have adopted the course of action outlined in the application. The court concluded that the making of the two settlements (the second settlement providing comfort for the specific beneficiaries under his will) would be in the best interests of the patient and the Guardian was therefore authorised to make the settlements as soon as possible.

The earlier clarification by the Royal Court of Guernsey and its subsequent ruling has significantly developed the law in relation to Guernsey's customary law of curatelle. This further evolution of the law is noteworthy as the customary laws of the island, which have been observed for centuries, are certainly not changed on a whim.

A guardian has always had the role of enhancing and protecting a patient's assets. Clearly, placing those assets into a trust which puts them outside of the direct control of both the patient and their guardian can be said neither to enhance nor protect the patient's assets. Disposing of a patient's assets in such a way also has the potential to bypass Guernsey's forced heirship rules.

Nevertheless, the judgement must be welcome as it helps to clarify the circumstances in which the court will grant authority for a guardian to settle a patient's assets. However, this case appears to be somewhat more straightforward than others may prove to be, given the previous conduct of the patient and the evidence which was put before the court.

We are still left with the question of how far the court will go in exercising their powers and in what circumstances it will be considered outside of the patient's best interests to avoid inheritance tax liability.

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.

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

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

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions