The Isle of Man Department of Economic Development recently announced that Appleby has launched the Appleby Charitable Foundation, the Island's first Foundation to be approved and established under the new Foundations Act 2011 ("the Act").
Effective from 1 January 2012, the Act introduces a civil law entity to a jurisdiction renowned for its common law practice opening new opportunities on the Island for businesses and individuals.
A self-owning legal entity formed by the dedication of property to specified purposes, a foundation serves for the purpose of private wealth structuring as well as for charitable and commercial structures. There is a requirement for registration, but this brings certainty and peace of mind for clients as well as ensuring separation from the Isle of Man's trust law.
The benefits of an Isle of Man foundation include:
- Limitation on liability – a foundation is a separate legal personality meaning that all liabilities remain liabilities of the foundation and do not attach to foundation members
- Control - the founder (equivalent to the settlor of a trust) can be a member of the foundation council and reserve powers to himself
- No perpetuity period – allowing a perpetual arrangement for the management of wealth
- Self-owning use with additional structures – ideal for private trust companies
- Limited public filing requirements
- Suitability for planning – ideal for controlled management of assets and careful provision for families
Appleby has been instrumental in the development of the Act, working closely with Treasury and the Department of Economic Development to establish the framework needed for the Act to be fully implemented. Our Private Client & Trusts practice is able to provide comprehensive advise on the establishment, administration and management of Isle of Man foundations.
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.