Guernsey has a rich history of financial entrepreneurial spirit and this is no better displayed than in the use of Trusts and the successful Fiduciary industry that we have here today.
A History of the Guernsey Trust…
Guernsey Law is a product of a unique blend of its Norman French and Anglo-Saxon heritage, resulting in a combination of Civil and Common Law codes and concepts which includes the use of “trusts”. This ancient melding of cultures, customs and principles offers an intriguing insight into the Island’s historic past, but also gives a glimpse of the ability and willingness of its people to adapt and embrace pragmatic change.
Following his conquest of England, William Duke of Normandy, became William I of England. He ruled his English and Norman domains (including the Channel Islands) as one Kingdom. In 1204, his descendant, King John lost the Crowns’ Norman lands to the French King, however over the subsequent years and generations the Channel Islands remained loyal to the English Crown. In return for their loyalty the Islands were granted generous levels of autonomy. Over the centuries Guernsey developed its own laws largely drawn from French customary law. The Island created its own judicial and legislative system presided over by an elected parliament (known as the “States”).
With a benign tax system and stable democratic system of government, Guernsey was an obvious choice as a centre for the emerging wealth management industry of the 1960’s and its financial services industry evolved rapidly and with it new methods and financial instruments. The use of the Anglo-Saxon Trust became a mainstay of the private wealth industry. Without a body of law of its own, the Royal Court in Guernsey recognised the value of case law from other jurisdictions and particularly England. Whilst there are a number of legal references cited over the last 100 years to Guernsey’s recognition of trusts and its adoption into customary Law, certainty arrived following the introduction of the Trusts (Guernsey) Law 1989. This was superseded by the 2007 legislation (the Trusts (Guernsey) Law 2007) which is a modern piece of legislation designed to meet the needs of the Island’s international clientele.
The Guernsey Trust in the 21st Century…
It is suggested that there are as many, if not more, Guernsey Law Trusts established and managed outside of Guernsey today than there are within the Island itself. This is testament to the professional regard the Island, its legislation and judiciary are held in internationally. With these legislative changes and such a vibrant trust management jurisdiction Guernsey has now established its own body of trust related case law.
As a wealth planning and succession tool, the Guernsey trust is pre-eminent. Trusts can be imported or exported to and from the jurisdiction with minimal formality. There are no public registration or filing requirements for trusts nor public disclosure of beneficial interests. The regulated environment in Guernsey ensures that trusts are managed in constructive yet discreet ways and are still largely used to preserve and pass on family wealth. It is accepted that trusts are not the panacea of all planning objectives, but they remain highly versatile and are as relevant today as they were at the time of their 12th century origins.
The private wealth management sector in Guernsey has grown considerably since its birth in the 1960’s with over 150 trust companies now operating from the Island. Following the introduction of regulations in 2001, licensing and supervising trust and company service providers, this part of the finance industry has become known as the “Fiduciary Sector”, again echoing the blend between Civil Code and Common Law. Guernsey’s Fiduciary Sector remains at the forefront of trust management internationally.