Jersey is used extensively by individuals, very often expatriates, who wish to take advantage of the extensive range of financial services available through the banks, investment houses and other institutions, as well as the benign tax arrangements for non-residents.
There are advantages in settling funds into trust for the benefit of the settlor's dependants and the formality of a trust ensures that the assets are distributed in an orderly way. Although, there is no inheritance tax in Jersey, estate situated on the Island has to be declared on the death of the owner, even a non-resident owner, and if the assets are place in a trust, there is no requirement for probate.
The instrument establishing a discretionary trust is normally a lengthy document and provision is made to provide the trustees with extensive powers to engage in a wide range of activities. However, this kind of document is not always suitable for an individual who simply wishes to safeguard his savings by placing the assets into a trust.
With these circumstances in mind, one of the major banks asked us to consider a simpler form of trust to provide for the holding of investments of various kinds. As a result of our development programme, we are now able to provide a short form trust, and although the powers of the trustees are limited, there is the same protection provided under Jersey law. A trust can be settled with £100 and funds can be added in stages.
It is usual to appoint corporate trustees and this has the advantage of continuity because the operation of the trust is not affected by the death of an individual trustee. Although the assets are under the control of the trustees, the settlor usually provides a letter of wishes for the guidance of the trustees and whilst this is not a legally binding document, it is helpful in ensuring that the settlor's intentions are followed.
Because the short form of trust is simpler, the costs are less, and we are able to offer significant savings.
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.