Jersey: Jersey Private Trust Companies

Private trust companies ("PTCs") have been widely used in international structured finance transactions and are now used increasingly by high net-worth private clients. In the latter context, certain families may prefer to establish their own PTC to act as the trustee of the trusts which they plan to create, rather than transferring assets to an offshore service provider's professional trustee company.

This briefing note considers key issues relating to the establishment and use of a Jersey PTC in the context of private wealth management. References to "PTCs" are to companies which operate as corporate trustees, although it is also possible for a foundation to act as a trustee.


The Financial Services (Jersey) Law, 1998 (as amended) (the "Financial Services Law") is the principal legislation which regulates Jersey's trust company industry. Amongst other things, it requires any person who carries out trust company business (as a business) in the Island to be duly registered by the Jersey Financial Services Commission (the "JFSC") under the Financial Services Law. As one would expect, acting as or fulfilling or arranging for another person to act as or fulfil the functions of a trustee of an express trust is a regulated activity under the Financial Services Law.

Since 2000, however, PTCs have been exempt from the requirement to register under the Financial Services Law and have been subject to the lightest of touches in terms of their regulation by the JFSC.

Under the Financial Services (Trust Company Business (Exemptions) (Jersey) Order 2000), a Jersey PTC is exempt from the requirement to register as a trust company business provided:

  • it is a company (defined under the Financial Services Law as a body corporate incorporated with or without limited liability in any part of the world);
  • it provides trust company business services only in respect of a specific trust or trusts;
  • it does not solicit from or provide trust company services to the public;
  • it is administered by a 'registered person' who is registered to carry out trust company business under the Financial Services Law; and
  • it notifies its name to the JFSC

The key points to note are:

  • Unlike many other jurisdictions, there is no requirement in Jersey to seek express exemption from regulation, to pay any PTC fees or to capitalise the PTC in a particular way. The JFSC does however need to be notified – this is usually done by way of a simple letter.
  • There is no requirement to submit to the JFSC copies of documents in relation to the trust or trusts in respect of which the PTC is to act as trustee.
  • There is also no specific requirement for a regulated trust company to manage the PTC. The requirement is only that the "administration" of the PTC is carried out by a regulated entity in Jersey. Regarding what constitutes "administration" for the purposes of the exemption:
  1. there is no definition or published guidance from the JFSC. Our view is that "administration" constitutes more than company secretarial services but does not necessarily require the regulated entity to have a representative on the board of directors of the PTC;
  2. that said, the regulatory climate in Jersey means that most regulated trust companies in Jersey would look to place at least one of its professional directors on the board of a PTC. Amongst other things, this is to ensure that there is a sufficient flow of information about the management and governance of the PTC so that the regulated trust company is able to comply with its own regulatory obligations.

Whilst there has been some debate in the past about  a PTC comprises a "financial services business" for the purposes of Jersey's anti-money laundering legislation, this point was settled when the Proceeds of Crime (Jersey) Law 1999 was amended to exempt expressly its application to PTCs. There is therefore no requirement in Jersey for a PTC to have a dedicated money-laundering or compliance reporting officer.

The ownership structure of a PTC

The shares in a PTC can be owned in a number of different ways depending on tax considerations and the client's circumstances. The principal alternatives are set out below.


Whilst it is possible for an individual, such as the settlor or a member of the settlor's family (or his/her nominee), to be the shareholder of a PTC, such an arrangement can give rise to concerns upon the individual's death.

One concern is practical and relates to probate requirements in respect of the individual ownership of the PTC's shares. The second concern relates to succession and the suitability of those person(s) to whom the PTC shares devolve upon the individual's death.

Purpose Trust

In view of the problems associated with ownership by an individual, a PTC is usually an 'orphaned' structure so that its ownership is not attributable to any particular person.

The shares of a PTC are therefore often held under the terms of a charitable or non-charitable purpose trust (a "Trust"). Where there is doubt about whether a charitable purpose trust will be used for genuine charitable purposes, a non-charitable purpose trust is used to avoid allegations that the charitable trust is a sham.

If a Jersey non-charitable purpose trust is used, an enforcer must be appointed to enforce the stated purpose of such trust. The enforcer must be a separate entity from the trustee but does not need to be licensed by the JFSC. For example, a client's professional adviser could act as the enforcer.

The trustee of the Trust (the "Trustee") can be a different legal entity, possibly located in a different jurisdiction, to the administrator of the PTC which (to gain exemption under the Financial Services Law) must be based in Jersey. The division of roles in this way can assist with separating out the respective rights and responsibilities within the structure.


A foundation can be established with the sole object of holding the shares in a PTC.

A foundation is incorporated on the instruction of a founder, but is not owned by the founder, nor by anyone else. Therefore ownership issues will not arise in that context.

Alternatively, a foundation could itself be used to act as the trustee in the place of the PTC. The private trust company business exemption from registration under the Financial Services Law is equally available to Jersey foundations.

Incorporating a PTC

A PTC can be incorporated with or without limited liability in any part of the world and is usually incorporated using standard private company memorandum and articles of association (or the equivalent).

Directors' liability

One reason for the increased use of PTCs in Jersey results directly from the abolition of the statutory guarantee which was historically imposed upon trust company directors under the Trusts (Jersey) Law 1984 (as amended). As a result of the abolition, the risk of personal liability under Jersey law has been reduced significantly and therefore lay directors such as family members are more willing to act as directors.

Some judicial discussion has taken place about the liability of a director of a trust company and whether 'dog-leg claims are sustainable under Jersey law. "Dog-leg" claims are based on the notion that the duties owed by a director to a company may, in certain circumstances, be regarded in law as an 'asset' of the trust of which the company is trustee. Whilst such claims have not been ruled out as impossible, they are certainly very difficult claims to construct and pursue.

Insofar as there are concerns about possible personal liability on the part of directors of the PTC, this can be addressed through the provision of indemnities and/or appropriate director and officer insurance.

Composition of the board of directors

The choice of the board of directors of a PTC is a key issue. The settlor may wish to control the composition of the board of directors and/or may wish to be a member of the board so that he or she participates actively in the decisions made by the PTC in relation to the underlying trusts and their businesses.

Control of the board of directors can be structured through the constitutional documentation of the PTC and/or through the terms of the Trust. It may be that the Trustee is required under the terms of the Trust to seek the approval of the settlor or a nominated other, such as the enforcer (in the case of a non-charitable purpose trust) or a protector, in relation to the appointment or removal of directors of the PTC. Alternatively, the Trustee could be required to follow the directions of the settlor or the enforcer in relation to the composition of the PTC's board of directors.

Whatever structuring and mechanisms are used in relation to the appointment or removal of directors (and indeed other aspects of the management of the affairs of the PTC, such as investment policy), a prevailing issue for advisers to the settlor and the trustees is for the settlor to understand how the balance of power will work in practice so that there are no surprises for the settlor, or indeed other family members, once the structure is in operation.

The selection of directors will be based on knowledge and experience although it is also likely to be influenced by tax considerations and the protection of privacy. Concern can arise if one or more of the directors of the PTC is resident in an unfavourable tax jurisdiction and adversely affects the location of the PTC's management and control. Issues can also arise if a director is subject to domestic legislation which can be used to obtain detailed information about the PTC, its underlying trusts and assets.

Where family members participate as directors, conflicts of interest need to be managed and this can be addressed in the constitutional documentation of the PTC, for example by regulating voting rights where personal conflicts of interest arise during the course of the PTC's business.

Settlor involvement

Settlor involvement can be achieved in several different ways and, dependent upon tax advice, that involvement usually takes one or more of the following forms:

  • as protector of and/or the person vested with reserved powers under the terms of underlying trusts of which the PTC is trustee;
  • as a member of the board of directors of the PTC;
  • as a member of an investment committee or council established to consult with the board of directors of the PTC regarding certain significant decisions affecting the underlying trusts, such as investment policy or the sale of family businesses; and/or
  • as protector or enforcer of the Trust which holds the share capital of the PTC.

The Settlor could also own the shares in the PTC but this may have undesirable consequences.

Operation and funding of a PTC

The regulated trust business which provides administrative services to the PTC will need a sufficient and prompt flow of information to be satisfied about the nature and conduct of the PTC's business. The mechanism by which information is relayed is generally a practical matter and varies between service providers.

Where a professional director from a regulated trust company business is appointed to the board of the PTC he or she will wish to ensure that the PTC is acting in a manner which accords with the terms of the underlying trusts of which it is trustee, that professional advice is sought where appropriate and that proper records are kept of the decisions taken by the PTC.

If there is a desire in due course to switch the administration of the PTC to a different service provider (or indeed to a different jurisdiction) this can, subject to the terms of the documentation in place, be easily achieved by terminating the administration agreement and putting a new one in place with the new service provider.

Changing the Trustee should also be straightforward given the limited assets (namely, the share capital of the PTC) held by the Trustee.

If the PTC is an 'orphaned' structure, thought must be given to the way in which the PTC will be funded. It is often preferable, where possible, for a structure to be self-sufficient financially (so it can be kept in good standing). To achieve this, the PTC needs to be sufficiently capitalised or be able to discharge its running costs from the underlying trust(s) by, for example, invoicing for trustee services.

Family awareness

Family awareness of the PTC and the manner in which the trust structure as a whole is intended to operate is also a key issue for settlors. One way of communicating the settlor's wishes is to agree a family charter which provides a formal statement of the role, investment principles and philanthropic intentions of the PTC structure established.

A charter can encourage a uniform approach to the family's affairs from beneficiaries and other participants, such as external directors of the PTC, thereby reducing the scope for dispute amongst family members at a future date.


Jersey's legal and regulatory framework, together with the resident administration expertise, makes the Island an excellent choice for establishing a PTC.

PTCs provide a flexible, timeless and relatively portable way in which to arrange bespoke trustee services. PTCs offer a convenient platform from which family members can participate in a meaningful way in the management of underlying businesses.

Particular care needs to be taken with regard to the initial structuring of the PTC. It is critical that the rights, powers and responsibilities vested in particular parties are fully understood (particularly by the settlor both during his or her lifetime and in the future) and Carey Olsen's experienced team of trust lawyers can guide the parties through this.

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.

Events from this Firm
24 Jan 2018, Conference, St Peter Port, Guernsey

In association with the Guernsey Training Agency, we are pleased to offer a unique, interactive event that will explore the role of integrity in the modern employment relationship, with a particular focus on the financial services sector.

15 Mar 2018, Seminar, St Peter Port, Guernsey

We are once again sponsoring C5 Fraud, Asset Tracing & Recovery which is due to take place on 15-16 March 2018 (tbc) in Geneva.

In association with
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
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 you may opt out by clicking here

    Terms & Conditions and Privacy Statement (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

    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’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.


    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.


    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.

    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 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.


    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.


    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.


    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.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    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

    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

    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

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

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