Isle
of Man Trust Management
Trust
management, particularly for wealthy UK individuals,
has been a traditional business for the Isle
of Man. Successive tightenings of UK anti-avoidance
legislation have reduced the possibilities
for UK citizens, but trust work continues
to be significant; many Collective Investment
Funds are of course based on Trusts. The recent
introduction of the purpose trust will probably
lead to an increase in corporate trust work.
The
Isle of Man has a well-developed legal and
financial infrastructure for trust management.
With a large established base of trusts, and
a growing reliance on corporate work, the
volume of trust litigation is becoming significant.
In
common with many other offshore jurisdictions,
the Isle of Man responded to pressure from
the OECD by tightening up its regulatory regime.
Until
2004, trustees were not licensed or supervised
by the Financial Supervision Commission, unless
the fiduciary carried on business in investment,
banking or insurance, in which case licences
were required under those headings.
The
Fiduciary Services Act, 2004, extended the
Corporate Service Providers Act 2000 to require
persons who, by way of business, provide certain
services to trusts and partnerships or act
as nominee holders of units in unit trusts,
to hold a fiduciary licence.
The licensing of fiduciaries brought the Isle
of Man into line with similar arrangements
already established in other offshore jurisdictions
such as Bermuda, Guernsey and Jersey and an
external review of the proposals by London
law firm Stikeman Elliot found the bill compares
favourably with legislation in these places.
Alongside
the Fiduciary Services Act, the Isle of Man
Financial Supervision Commission updated its
Fiduciary Services Regulatory Codes.
“In
amending the draft Fiduciary Services (General
Requirements) Regulatory Code and the Fiduciary
Service (Clients’ Money and Trust Money) Regulatory
Code and associated guidance notes, we were
particularly aware of the industry’s concerns
in respect of potential conflict with trust
law and that the financial resources requirements
should not be too onerous,” noted Jane Bates,
Head of Authorisations & Companies at the
FSC.
“We
hope that we have now achieved a good balance
and have set standards that will meet the
Commission’s regulatory imperatives without
placing an unreasonable burden on the industry,”
she added.
Click
on Formation
of Trusts or Taxation
of Trusts for further information.
