A private trust company ("PTC") is a privately owned
incorporated Jersey or non-Jersey company that operates as a trust
company. It does not, however, offer public trustee services but
instead acts as the appointed trustee of a specific trust or a
related group of trusts - usually for a particular family, for
specific philanthropic objectives or for a common settlor.
Jersey law requires any person who carries on trust company
business in or from within the Island, or any Jersey registered
company that carries on that business anywhere in the world, to
apply to the Jersey Financial Services Commission
("JFSC") to be registered to do so, unless such person is
able to rely upon one of the available exemptions.
Provided an intended PTC meets all the following criteria it may
rely upon an exemption and will not be required to apply to the
JFSC for trust company business registration:
it's purpose is solely to provide trust company business
services in respect of a specific trust or trusts;
it does not solicit from or provide trust company business
services to the public;
it' s administration is carried out by a registered person
registered (e.g. Vistra) to carry out trust company business.
The exemption is limited since certain statutory provisions will
continue to apply to the PTC and as a result the PTC continues to
be subject to the overall regulation of the JFSC.
When establishing a PTC, the only formality that needs to be
followed is to notify its name to the JFSC. Reliance upon the
exemption does not require any additional consent or enquiry and a
PTC can be established on a 24-hour fast-track basis in Jersey.
Furthermore, there is no requirement to file accounts or any other
information, thus making it a discreet, private structure.
When establishing a PTC structure, particular thought must be
given to the ownership arrangement, administration and board
composition of the PTC. Whilst the ownership of a PTC is flexible,
it is likely that it will be primarily influenced by tax
considerations. Other factors, such as confidentiality issues,
personal circumstances, family disputes or succession planning may
also require consideration.
Since direct personal ownership of a PTC is often not feasible,
private foundations or purpose trusts (either charitable or
non-charitable) are frequently preferred alternative ownership
As already noted, a PTC must be administered by a Jersey
registered trust company. 'Administration' is not defined
by the legislation and the PTC board can be tailored to suit the
requirements of the particular structure. As with ownership
arrangements, when considering the composition of the PTC board,
careful deliberation must also be made of factors which may affect
the efficiency of the PTC governance. These may include director
disclosure obligations, conflicts of interest, fiscal and
continuity and succession planning issues.
The possible uses of PTCs are considerable, making them a highly
flexible and appealing alternative for high net worth families to
the more traditional trust structures. PTCs may simultaneously have
both commercial and charitable objectives which gives added
A PTC can be utilised to consolidate the administration of
multiple trusts, each for distinct purposes, thereby conveniently
managing and preserving family wealth over generations and planning
effectively for the future ownership of family business interests.
A PTC will ensure greater family control over the family trusts
and, often most importantly, the management of the trusts'
underlying investments. In addition, PTCs can provide an ideal
framework in which to introduce younger family members into the
family business and to the disciplines of wealth administration. By
controlling all or part of the management of the family trusts,
ongoing trustee fees can also be managed to some extent and
confidentiality improved. Furthermore, the trustee's decision
making process will generally be more rapid than in a traditional
In summary therefore, PTCs offer high net worth families an
attractive planning alternative to traditional trust structures for
both their private wealth management needs and philanthropic
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Miami-based Offshore Alert Conference has become a regular draw for representatives of Cayman’s financial services industry in recent years, and this year’s event is no exception with the Cayman Islands lending strong support through the provision of speakers from both the financial services industry and Government’s Ministry for Financial Services.
The Organisation for Economic Co-operation and Development recently published a report in which the Cayman Islands was commended for the "streamlined, efficient and responsive procedures it has is in place to facilitate the exchange of information for tax purposes".
On 1st April the new UK "Twin Peaks" regulatory regime was launched. The much criticised FSA was replaced with the Financial Conduct Authority ("FCA") and the Prudential Regulatory Authority ("PRA"). Martin Wheatley, the FCA’s chief executive has publicly criticised the approach of the former FSA as "robotic" and a more challenging UK regulatory climate is widely anticipated.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”