Gibraltar Trusts
ISOLAS has a long history in the provision of trust services in association with Fiduciary Trust Limited, part of the Fiduciary Management group of companies.
Trust legislation in Gibraltar is generally based on the trust law of the United Kingdom; thus Gibraltar recognises and gives full effect to the concept of the trust. The Trustee Act of Gibraltar is the main governing Act; it is based on the Trustee Act 1893 of the United Kingdom, with amendments being made from time to time. In 1989 Gibraltar introduced the Trusts (Recognition) Act. This applies to Gibraltar the provisions of the Convention on the Law Applicable to Trusts and their Recognition agreed at The Hague on 20 October 1984.
An amendment to Gibraltar’s Bankruptcy Act made in 1990 now enables asset protection trusts to be established in Gibraltar. The effect is that certain dispositions shall not be voidable at the instance of, or upon application by, any creditor or settlor, provided certain conditions, including the solvency of the settlor are complied with.
Gibraltar’s Registered Trusts Act 1999 allows a trust to be registered with the Registrar of Trusts at Companies House. The Registrar will keep an index of trusts so registered. No information will be maintained at Companies House. Registration is voluntary.
The Trustees Act creates the statutory framework, outlining the powers and duties of trustees and setting out provisions in relation to the investment of trust funds and the powers of the court (mostly in relation to the appointment of new trustees and vesting orders). The statutory framework generally serves to provide guidance in respect of matters which have not been dealt with in the Trust Deed.
Asset Protection Trusts ('APT')
An amendment made in 1990 to Gibraltar’s Bankruptcy Act enables asset protection trusts to be established in Gibraltar. The Bankruptcy Act is based on the Bankruptcy Act 1914 of the United Kingdom, which renders void any trusts fraudulently intended to avoid obligations in the future. The amendment to the Bankruptcy Act means that certain dispositions are not voidable at the instance of, or upon an application by, any creditor of the settlor provided certain conditions are complied with.
The settlement of assets will not be voidable by any creditor of the settlor provided that:
(a) the settlor is an individual;
(b) the settlor is not insolvent at the date of the settlement; and
(c) the settlor does not become insolvent in consequence of the settlement before the settlement is registered.
Gibraltar introduced asset protection trust legislation within the provisions of the bankruptcy law, rather than within fraudulent conveyancing laws, so that, for a creditor to commence an action in Gibraltar, he must commence an action under the bankruptcy law – and the standard of intent to defraud that must be met is much narrower and more difficult for a creditor to satisfy. In order to commence an action under the bankruptcy law it must be demonstrated that the settlor is resident or domiciled in Gibraltar or that an ‘act of bankruptcy’ has been committed in Gibraltar.
