Services · Trusts & private foundations

Guernsey trust: how to set one up and what it does

Wealth protection and succession planning in a jurisdiction with serious supervision. Open pricing, with the final quote fixed in writing before work starts.

What a Guernsey trust is and who it suits

A trust is not a company or an account but a legal relationship: a settlor transfers assets to a trustee, who holds and manages them for the beneficiaries under a trust deed. From the moment of transfer the assets belong to the trustee, not to the settlor. That is both the point of the structure and the part that is uncomfortable for anyone unwilling to give up direct control.

Guernsey trusts run under the Trusts (Guernsey) Law, 2007. What that law delivers in practice:

• No perpetuity limit. The rule against perpetuities was abolished, so a Guernsey trust can last indefinitely.
• Purpose trusts. The law expressly recognises non-charitable purpose trusts with no beneficiaries, which is useful for holding shares in a holding company or a private trust company.
• Reserved powers. The settlor may reserve, or give a protector, powers to change trustees, direct investments, change the governing law and more, without invalidating the trust.
• Firewall provisions. Questions about the trust's validity are decided under Guernsey law; foreign forced heirship rules and matrimonial orders do not by themselves render the trust void.

Who it suits

• Families who want succession planning without probate disputes and with a mechanism that works across generations.
• Business owners consolidating shareholdings and portfolios into one structure who are comfortable being transparent with the trustee and their home tax authority.
• Anyone who values the quality of supervision and case law over saving on fees.

Who it does not suit

• Anyone looking for anonymity. The trustee must know everyone involved and where the money came from, and information is disclosed where the law requires it, including under international exchange.
• Anyone who wants to keep full control and treat the assets as their own: a court can find such a trust a sham.
• Anyone with modest assets: fixed trustee fees make the structure uneconomic.
• Anyone trying to shield assets from creditors who already have claims, or from a divorce already under way.

If a structure with its own legal personality fits better, look at Guernsey foundations or the whole trusts and private foundations section.

Requirements: trustee, documents and compliance

There is no minimum capital for a Guernsey trust: the law sets no threshold, and in practice a trust is often settled with a nominal sum, with assets added later. There are no office, local director or economic substance requirements either, because a trust is not a company. The requirements sit elsewhere.

A licensed trustee

Acting as a trustee in Guernsey is a regulated activity under the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc. (Bailiwick of Guernsey) Law, 2020. Licences are issued by the Guernsey Financial Services Commission. One recent point matters: under updated regulator guidance from September 2025, private trust companies also fall within that law and must obtain either a full fiduciary licence or a limited permission, even where they do not act by way of business.

Structure documents

• The trust deed: beneficiaries or purpose, trustee powers, powers reserved to the settlor, the protector's role, governing law, the mechanism for changing trustee;
• a letter of wishes, formally optional but in practice central, explaining to the trustee how you expect distributions to work;
• asset documents: corporate records, portfolio statements, title documents for real estate.

Compliance

Due diligence happens before signing: identity and address for the settlor, protector and beneficiaries, the ownership chain down to ultimate beneficial owners, and evidence of both source of wealth and source of the specific funds. This is not a formality; it is where most projects fall apart. There is no public register of trusts in Guernsey, and the island's central beneficial ownership register covers legal persons rather than trusts. That said, for a trust with a corporate trustee the beneficial ownership perimeter takes in the trustee itself, its directors and anyone who controls the trust or can appoint and remove trustees.

How setting up a trust works, step by step

An indicative route. Timelines depend on how fast compliance moves and how complex the assets are, so we describe stages rather than dates.

1. Defining the task. What is being protected and from what, who the beneficiaries are, where they are tax resident, whether there are live creditors or disputes. This step often shows that no trust is needed.
2. Choosing the trustee. We select a licensed firm suited to your asset type: portfolios, operating company shares, real estate, specialist classes. Fees and minimum sizes are settled at this point.
3. Preliminary compliance. The trustee requests information on the parties and the source of wealth. A decline at this stage is possible and is normal market practice.
4. Negotiating the trust deed. Powers, distribution mechanics, how trustees are replaced, the protector's role, dispute resolution.
5. Signing and settlement. The trust comes into existence when the deed is signed and the initial property is settled. There is no registration with a government registry.
6. Transferring assets. The longest stage: re-registering shares, opening accounts and brokerage agreements in the trustee's name, transferring real estate. The trustee accepts each asset separately.
7. Administration. Reporting, trustee resolutions, distributions, structural changes, updating the letter of wishes, and annual compliance and information-exchange procedures.

Establishment itself can be quick. The real timeline to a funded trust is set by stages 3 and 6, not by signing a document.

What a Guernsey trust costs

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees and bank tariffs are billed separately unless explicitly included.

The total has three parts: our work, the trustee's one-off establishment charge and the annual administration fee. The last is usually billed on time spent or as a percentage of asset value with a floor, which is why an identical structure costs differently on a one million portfolio and a ten million one. Legal due diligence on the assets, bank tariffs and, where needed, independent valuations are billed separately.

Tax and reporting

Guernsey itself levies no capital gains tax and no inheritance tax. The standard rate of income tax is 20 per cent, but a trust with no Guernsey-resident beneficiaries is taxed only on Guernsey-source income, and where there is none, no Guernsey tax generally arises. In typical structures there is also no withholding on distributions to non-resident beneficiaries.

The point that matters more: the tax outcome is decided not by Guernsey but by the countries where the settlor and beneficiaries are tax resident. Most jurisdictions have controlled foreign structure rules, attribution of income to the settlor and reporting obligations. A Guernsey trust removes none of them.

Reporting under the Common Reporting Standard and FATCA is handled by the trustee: it classifies the trust and reports on reportable persons to its own tax authority, which passes the data to their countries of residence. Plan the structure on the assumption that tax authorities will know about it.

Risks and pitfalls

Sham trusts

If the settlor in fact keeps disposing of the assets and the trustee merely documents instructions, a court can find the trust a sham and treat the assets as still belonging to the settlor. Reserved powers are permitted, but their scope and the way they are used in practice have to survive scrutiny.

The law is changing

In May 2026 Guernsey's parliament approved amendments to the trusts law. Among them are a presumption that reserved powers are fiduciary unless the deed says otherwise, and a rework of limitation rules for breach of trust claims. The drafting is still being finalised and no commencement date has been announced, so new structures are sensibly written with the coming regime in mind.

Creditors and matrimonial disputes

Firewall protections work against future claims. Settling assets once creditors already have claims, or once divorce proceedings have started, invites challenge and creates personal exposure for the settlor.

Recognition outside common law

The Hague Convention on the law applicable to trusts extends to Guernsey, and contracting states including Italy, the Netherlands, Switzerland, Luxembourg and Liechtenstein recognise such structures. Where a country is not a party, the trust may simply not be seen as a separate arrangement and the assets treated as the settlor's own.

Common reasons a trustee declines

• Source of wealth cannot be evidenced: undocumented deals, cash, old turnover with nothing to back it;
• assets the trustee will not take on: crypto without a clean history, stakes in high-risk sectors, real estate inside a sanctions perimeter;
• parties from jurisdictions outside the trustee's risk appetite;
• a vague purpose: if the only motive is reducing tax, trustees usually pass.

How we work

We start with the objective, not the jurisdiction. It often turns out that a will, a marital agreement or a holding structure does the job instead of a trust, and we say so plainly, even when that means there is no project. If a trust really is the answer, we help you weigh Guernsey against Jersey and the other options in the trusts and private foundations section.

From there: selecting a licensed trustee suited to your assets, negotiating the trust deed, supporting compliance and the transfer of assets, then ongoing administration - structural changes, communication with the trustee, beneficiaries' questions. We give no guarantees on the outcome of trustee negotiations: accepting a client and their assets is the trustee's decision. The quote is fixed in writing before we start. Other work is listed under services, and the jurisdiction comparison is in our article on Jersey and Guernsey trusts and foundations.

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