Wealth management in the Channel Islands

We outline the various vehicles for wealth management in the Channel Islands that may interest foreign individuals and businesses.

When we think about the Channel Islands, we are often reminded of picturesque coastlines, home-grown produce and flexible tax regimes. However, there is much more to the two largest islands in the Channel, Jersey and Guernsey. These two British Crown dependencies situated between England and France both have independent governments and legal systems. They are well-regulated and offer political and economic stability, supported by strong governance and a firm commitment to international standards. In addition, the islands have a comprehensive professional support network and excellent business and communications infrastructures.

As well as having a great deal in common with each other, the islands also have their own unique attributes that make them attractive jurisdictions for wealth management services. Dating back to the late sixties, Jersey has offered private wealth management services to individuals and businesses. The island is home to £400billion in trusts established by private individuals and 357 foundations, so there is no shortage of expertise in this area. Jersey companies are also eligible for inclusion on major stock exchanges, including the Hong Kong Stock Exchange, which means that the island attracts a diverse group of companies and therefore has a wealth of expertise at its fingertips.

Although a smaller island, Guernsey still packs a punch. The 2-REG Guernsey aircraft registry is known for its ease of registration, rapid response and 24-hour support, providing a hassle-free and cost-effective solution for private jet owners. What’s more, Guernsey has expertise in a range of niche areas, owing to its mature system of licensed banks, advocates, investment, insurance and fund managers. Because of this, Guernsey has been able to structure its legislation surrounding key financial services to the investor’s benefit, without compromising on transparency and integrity.

Foundations is one area where Guernsey has accomplished this. Foundations legislation in Guernsey differs from other jurisdictions in that where a foundation has been established for a purpose (or for the benefit of disenfranchised beneficiaries) the Foundations (Guernsey) Law, 2012 (the ‘Law’) provides that a guardian must be appointed to act as an enforcer of the purpose or benefit. This safeguards that the purpose or benefit is always capable of enforcement. A point worth noting is that a founder can be appointed as guardian, however a councillor cannot be a guardian.

Other areas where the Channel Islands have a favourable position include Employee Benefit Trusts (EBTs). EBTs have been established for a number of years to encourage employee share participation and have principally operated as an incentive for staff loyalty and productivity. Over this period, trustees in the Channel Islands have developed a significant level of expertise.

This expertise, particularly in the administration of bespoke arrangements, has helped to develop a level of professional service, speed of response and flexibility that the UK providers of large platforms find difficult to match. It is often for this reason - an overall high quality of service - that a Channel Islands-based trustee is appointed, especially as there are few onshore UK trustees as experienced in the administration of specialist solutions such as EBTs.Equiom’s Channel Islands’ teams have a wealth of knowledge and experience in the establishment and administration of trust, company and foundation structures for both private and corporate clients. With its multi-jurisdictional wealth planning offering, Equiom can provide bespoke solutions for client families across Europe, the Middle East, Asia, the United States and the Caribbean.

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.