Back in March, I published a piece on the different types of companies available in Gibraltar and those offered by us here at Acquarius. Since then, correspondents have asked for a similar summary on trusts – the other half of the equation – which are bread and butter for a business like ours, defined as a Trust & Corporate Services Provider (TCSP). 

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Acquarius holds this designation, meaning we are authorised to establish and manage both trusts and corporate structures. In some jurisdictions, regulation allows firms to manage companies without being professional trustees. However, in Gibraltar, it is common – and indeed practical – for firms to be regulated to provide both sets of services.

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Incidentally anyone wishing to check the regulated status of either a professional trustee firm or company manager may do so by looking at the relevant pages from the regulator’s website (respectively GFSC - Gibraltar Financial Services Commission - Regulated Entities and GFSC - Gibraltar Financial Services Commission - Regulated Entities). Indeed, I would recommend that one does so.

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That, however, is where generalisation should end. Trust work is, by definition, very different from its company counterpart. In this short piece I will look at just a few trust types but – spoiler alert – there are many more out there and not all are recognised nor available across every jurisdiction.

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It is worth re-stating what a trust represents, and why creating one might be advisable.  In short, a trust is a legal arrangement where one party (the trustees) holds, manages, controls and distributes assets for the benefit of other(s) (beneficiaries). Key reasons for the creation of a trust structure might include the management of an estate, asset protection, and an opportunity to “future proof” loved ones.  The peace of mind provided by a well thought out trust cannot be overstated.

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Gibraltar is fortunate to have trust legislation that closely mirrors English common law. Indeed, this is one of the principal attractions of Gibraltar to international clients and their advisers. The result? A combination of tried and tested English legal principles delivered by a well-regulated, internationally recognised jurisdiction. 

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Gibraltar offers numerous advantages, contributing to its well-earned reputation as a top-tier trust jurisdiction – for many, the jurisdiction of choice.

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At Acquarius, most of our trust work involves Discretionary Trusts, in their majority irrevocable in nature, providing certainty for current affairs and future generations alike. Revocable trusts can be terminated, which may reduce their effectiveness for long-term planning.

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Within our client portfolio, we also have exposure to Interest in Possession Trusts where a beneficiary has a right to income or assets for a specified period. Likewise, to Purpose Trusts, which are used for specific objectives that may include charitable or other philanthropic goals. Our expertise extends to the management of Asset Protection Trusts too, which are created under bespoke legislation. The list goes on. To the mix I could add Foundations and the more complex Private Trust Company structure – both have been covered in previous Acquarius Insights.

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For me, the standout advantages of trusts relate to effective succession planning together with an increased element of certainty, enhanced asset protection and, when properly structured, efficient tax planning too. That said, it is essential to obtain independent professional advice in advance especially when dealing with multiple jurisdictions. A trust can play a powerful role as part of a wider estate or business plan, but only when structured correctly from the outset. 

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Clients are often surprised by the wide range of asset types a trust can hold, and indeed what it should not! Common examples include cash and investment portfolios. Good practice typically advises that a trust would not normally hold real estate assets directly. Rather, the use of an underlying holding company with subsidiaries where necessary under the overall trust would be employed. With that said, the assets settled into trust can be located around the globe.

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Acquarius is a Gibraltar-based and regulated firm where our trustees are Gibraltar resident, and all our trusts are governed by Gibraltar law. Regulatory requirements, common sense, and good business practice dictate rigorous due diligence both upon onboarding and throughout the life of the trust – which may span generations. 

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In today’s complex and often unpredictable world, trusts are as relevant as ever – arguably, even more so than previously. Gibraltar offers a compelling combination of a robust legal framework, excellent regulation, and an experienced team of trust professionals. Add to that competitive fee structures, and it is easy to see why Gibraltar, and more so Acquarius, continues to attract international clients and their advisers.

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If you would like to explore how a trust – in any of its forms – might assist in your planning or that of your clients, please get in touch for a no-obligation conversation. We are here to help, and always happy to do so.