Appleby Isle of Man Senior Associate Erin Trimble-Cregeen and Associate Melissa Wong recently attended the Isle of Man STEP conference. In this update, Melissa shares some of the key themes from the event and a number of developments that may impact the Isle of Man Private Client and Trust Sector.
Complexity and Risk
As a result of challenges arising from regulatory changes, economic substance, the changing wishes of the next generations of families and the issues of privacy and confidentiality surrounding transparency and disclosure requirements, it is vital to focus on clients and building a comprehensive understanding of their needs. To ensure continued high service standards, trustees must embrace complexity and navigate effective solutions to challenges.
The importance of GDPR requirements continues to be a matter that all trustees must consider closely, given the significant penalties that can be incurred for getting it wrong. Professional trustees are almost always going to be viewed as a data controller and as a result, have certain obligations they must meet. It is important that professional trustees have internal guidance and training available to ensure they meet these obligations.
Recent trust law cases
An informative summary of recent cases by Marcus Flavin and Josh Lewison of Radcliffe Chambers evidenced a trend this year of trustees correcting mistakes, in particular where significant Inheritance Tax liabilities have been incurred. It's clear that these cases are very much decided on the specific facts. In Rogge v Rogge  EWHC 1949 Ch the initial transfer into a settlement was set aside, subject to counter-restitution, however, other transfers were not. This case also illustrated the importance of professional advisors understanding the future intentions of clients.
Cross-Border Enforcement Risks relevant to Isle of Man Trusts
Increasingly, often there are cross jurisdictional elements to a structure, including when beneficiaries are located in various jurisdictions. It's possible that some of these jurisdictions may not be familiar with the concept of trusts and trustees are encouraged to seek legal advice as soon as they are aware that there may be a risk of cross-border enforcement. In conjunction with the issues highlighted surrounding GDPR requirements, it's important that trustees are clear on what their duties are, and to whom, in each specific case.
The main theme from this year's conference is that it is as important as ever for trustees to be aware of their regulatory obligations, especially when a structure involves multiple jurisdictions and if a situation does arise, trustees should instruct legal counsel straight away to ensure they are aware of their obligations and duties.