Jersey’s leading role in wealth protection for private clients in Asia
Praxis recently partnered with Jersey Finance to host an event highlighting the strong appeal of Jersey offshore trusts for Asia private wealth clients. The panel event took place in Hong Kong SAR in March 2024 and was attended by advisers from the region.
Praxis Director Dan Toft, who has 25 years of experience providing offshore and onshore fiduciary services within the private wealth and corporate services industry, outlined the motivation for using Jersey structures. Dan spent the first 20 years of his career in Jersey before moving to Dubai with Praxis in late 2019, where he leads the UAE team.
Beginning with a review of the rapid growth of private wealth in Asia, Dan highlighted the high number of billionaires in the region and the significant opportunities this presents for Jersey as a jurisdiction of choice.
Jersey has a well-established trust regime, reaching its fortieth anniversary this year with the Trusts (Jersey) Law first introduced in 1984. Along with this sophisticated legislation, the island’s proximity to the UK, familiarity with UK assets, political and economic stability, favourable tax regime, and highly qualified professional services network make it one of the world’s leading international finance centres.
‘The island’s strong regulatory framework and legal system provide a high level of confidence for investors and families seeking asset protection and wealth management solutions,’ said Dan. ‘Using a Jersey trust or foundation structure can provide Asia clients with several features that make the jurisdiction an attractive option for wealth planning.’
Trusts provide elements of wealth preservation and succession planning by creating efficient structures to protect assets from claims - be they from creditors, bad actors or family members – as well as securing privacy for beneficial owners and tax optimisation. Praxis routinely works with global HNWI, UHNWI clients, family offices, and their advisers, who have links to the Asia region, to provide such solutions.
Family business trust solution
Dan highlighted several case studies to showcase Jersey’s appeal, including identifying a solution for a Hong Kong resident and national with wealth originating from a business started by his father in the 1950’s, listed in the 1990s and still majority owned by the family.
The proposed structure will see the shares in the listed business held by a British Virgin Islands double company structure, which will be owned by a Jersey PTC structure. The board of directors of the PTC will be the client, close family members, and Praxis as the professional services provider, giving the client and his family a degree of control over the trustee’s decisions. The client will reserve the power to direct investments in the trust (the Family Trust), with a life interest to the client and his wife (as co-settlors).
The benefit of reserving the power of investment in the Family Trust is that it gives the client control over when to sell or acquire shares in the listed business. The Settlor will likely feel that the trustees need to understand the business and the environment it operates in to properly advise on the timing of future sales and acquisitions, therefore the client can relieve the trustees of this duty by the terms of the reserved powers clause in the trust instrument.
In addition to reserving investment powers, the client and his wife, as co-settlors, have a life interest in the Family Trust, providing them with an income throughout their lifetime.
About Praxis in Jersey
Jersey has been a leading IFC for more than 60 years, combining a strong and respected regulatory framework with a robust, modern and sophisticated legal environment. Founded in Jersey over 50 years ago, Praxis is now one of the island’s largest independent financial services providers. To find out more about our Jersey private wealth services, including support with structuring trusts and foundations, please get in touch.
Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2024