Onshoring trusts for ethical reasons

The Guernsey court recently blessed the onshoring of three substantial Guernsey trusts with the express purpose of paying a significant amount of tax to HMRC, in a decision that has drawn attention in the offshore world and beyond.

The adult beneficiaries, based in the UK, all felt strongly that continuing to benefit from the tax advantages of having an offshore trust structure did not align with their values. The court approved the decision as being in the best interests of the beneficiaries of the trusts, even though it would deplete the trust fund. Notably, those most likely to be financially disadvantaged were future generations of the family, who may not share the same values as their ancestors.

Matt Guthrie and Diana Rodriguez of Ogier, the advocates for the protector who applied for the court’s blessing, will discuss the case and consider:

• Practical points on how the fiduciary decision was reached and how the blessing application was presented
• The extension of the Public Trustee v Cooper jurisdiction to fiduciaries other than trustees
• The meaning of ‘benefit’, and how the court may approach decisions motivated by social or ethical considerations rather than financial return
• The proper purpose test, and how fiduciaries should approach relevant but unknowable considerations, such as the likely attitudes of unborn beneficiaries
• What the case may signal about changing attitudes to wealth