Guernsey Foundations Near 100 Mark
by Amanda Banks, Lowtax.net, London
09 January, 2018
Almost 100 foundations have now been registered under the Guernsey's five-year-old Foundations Law, Guernsey Finance, the island's financial services promotional agency, has said.
Foundations were introduced on January 8, 2013, as a new solution for private wealth clients seeking more directional power over assets compared with traditional trust structures.
A foundation is an incorporated, self-owning, legal entity which, although having much in common with a trust, has a distinct legal personality, something that is more commonly associated with companies. A foundation has similar features to a trust in that it has a founder who is similar to a settlor, beneficiaries who have similar rights to those of a discretionary trust, and a foundation instrument and rules which are similar to a trust deed. Foundations are commonly used for wealth management, and residents of jurisdictions like the Middle and Far East are more familiar with foundations than with trusts, which do not exist in their legal systems.
Guernsey Finance said there are now 88 foundations on the island's foundations register, which was described as "encouraging" by Angela Calnan, group partner in the trusts and foundations team at law firm Collas Crill.
"Most of those that we have been involved with have been for 'super structures,'" said Calnan, adding: "...in my experience, Guernsey foundations are not being used for 'cookie cutter,' volume business."
Guernsey Finance said Collas Crill has established new foundations for South American families in connection with estate planning, involving endowments of GBP25m (USD34m) and GBP3.2bn, respectively. Collas Crill has also advised on a foundation established to act as trustee of trusts with significant UK land interests, it said.
"The Guernsey foundation has the advantage of being a very flexible structure, which lends itself well to bespoke estate planning mandates while also benefitting from the robust legal and regulatory environment here [that] clients are actively seeking out," said Calnan.
"In terms of the future for Guernsey foundations, I would not envisage huge numbers of foundations being registered each year, but these are likely to be for significant families with complex, high-value assets who want the comfort of a solid jurisdiction with strong estate planning expertise."
Dominic Wheatley, CEO of Guernsey Finance, said: "Guernsey has significant expertise in servicing structures for protecting and preserving private family wealth, and the foundation has provided another alternative. The Guernsey legislation also provides some aspects that differentiate the Guernsey foundation from others in the marketplace, and this has proved valuable."
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