Proposed changes to Isle of Man trust law
Guy Wiltcher
by Guy Wiltcher
The Trust and Trustees Bill 2022 has recently undergone consultation in the Isle of Man, seeking feedback on proposed changes to modernise existing trust legislation. The bill looks to provide clarity and certainty to both trust users and practitioners, as well as modernising legislation to meet the requirements of modern-day trusts.
Along with implementing new trust legislation, the bill would amend the Trustee Act 2001 and the Trustee Act 1961. The main changes to trust law proposed within the bill can be briefly summarised under six headings.
Disclosure of trust information: This seeks to provide clarity on who may apply for trust information, and circumstances in which a trustee may refuse to provide the same; and will solidify the position as set out in the case of Schmidt v Rosewood.
Power of trustee to contract with themself: This insertion seeks to facilitate a trustee contracting with themself when acting as a trustee of multiple trusts. This would align with the demands of modern trusts and industry practice.
Liability of trustees to third parties: This insertion seeks to limit trustee liability to the trust fund in transactions with third parties, where that third party is informed in writing that the trustee is transacting in that capacity.
Power to declare exercise of a power voidable: This amendment seeks to provide a power to the Court to declare void a transfer or disposition where the trustee has failed to consider relevant factors (e.g. an unexpected tax consequence) when exercising their power, and, but for that failure, the trustee would not have exercised that power in that way.
Amendment to the Limitation Act 1984: Reducing the limitation period in which a beneficiary can bring a claim for breach of trust from six years to three years.
Social, ethical, governance, and environmental considerations: Trustees may, subject to the terms of the trust, have regard to social, ethical, governance and environmental matters, including the views and values of a beneficiary in certain matters. In some instances, a trustee may apply to the Court to modify a trust to permit assets to be invested in this regard where otherwise not permitted.
The above changes, if enacted, will see the Isle of Man’s trust legislation updated to satisfy the demands of modern trusts, stimulate competition within the Isle of Man’s trust industry, and create a more accurate reflection of common practice.
Greystone LLC is a leading independent accountancy firm on the Isle of Man which provides auditing and accounting, tax advisory, fiduciary, and estate planning services.
GGI member firmGreystone LLC, Chartered AccountantsDouglas, Isle of Man T: +44 1624 620711 (ext. 256)
Advisory, Auditing and Accounting, Tax
Guy Wiltcher is a chartered accountant and chartered tax advisor. He is a former managing partner of Greystone LLC Chartered Accountants, for whom he now works as a consultant.Contact Guy.
