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An Overview of Trust Law and Trustee Services in the British Virgin Islands PDF Print E-mail
Tuesday, 13 January 2009 13:35

An Overview of Trust Law and Trustee Services in the British Virgin Islands

BACKGROUND

The general principles of the trust laws of the British Virgin Islands (the "BVI") are derived from those of English
trust law. The principles of English common law and equity apply, as supplemented by BVI statute. The
Original Trustee Act was based on the English Trustee Act 1925 and Variation of Trusts Act 1958 but has now
been updated by the Trustee (Amendment) Acts, 1993 and 2003. Other significant statutes relating to trusts
and trustee services in the British Virgin Islands are the Virgin Islands Special Trusts Act, 2003 ("VISTA") the
Banks and Trust Companies Act, 1990 and the Financial Services (Exemptions) Regulations, 2007.
Trusts in the BVI may be established by persons in any part of the world with property or investments in any
part of the world. Trusts may be discretionary or fixed interest in nature or indeed any other type of trust
recognised under English common law. Income from the corpus of the trust may be accumulated for the
entire length of the period of the trust and the Trustee Act now enables beneficiary trusts to have a fixed
perpetuity period of up to 100 years as an alternative to the old common law period of lives in being plus
21 years.

VIRGIN ISLANDS SPECIAL TRUSTS ACT, 2003

Difficulties which arise from English trust law where trust assets comprise shares

The trust has always been regarded as one of the best "succession vehicles", but its use to cater for the
succession of shares in companies was historically been impeded by a rule of English trust law (the "prudent
man of business rule") which was designed to help preserve the value of trust investments. This rule
traditionally made the trust an unattractive vehicle to hold assets which settlors intend trustees to retain.
Another aspect of the rule effectively required trustees to monitor and intervene in the affairs of underlying
companies (as the English decisions Re: Lucking's Will Trusts and Bartlett v Barclays Bank Trust Co Ltd made
clear); this also created difficulties both from the settlor's......

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