FNB INterNatIoNal trustees limited

Transcription

1 FNB International TRUSTEES LIMITED Corporate Brochure

2

3 Our Experience & Structure FNB International Trustees (FNBIT), based in Guernsey, is a specialist provider of Offshore Trust and Company services to clients worldwide. It has been in existence for more than forty years. As such we are well placed to provide a range of Trustee and Company services tailored to the specific needs of the individual or client company, ranging from Private Trustee services to specialist Corporate services such as Employee Benefit Trusts or Pension Plans, including QROPS. FNBIT is part of the FirstRand Group. Headquartered in Johannesburg, The FirstRand Group is one of South Africa s largest and most highly rated financial services groups. It employs some 36,000 people world-wide and is listed on the Johannesburg Stock Exchange. Assets under management currently exceed US$130 billion. 1

4 2 Collecting shells

5 Guernsey has developed a mass of experience, infrastructure and accumulated intellectual capital, which ensures the Island remains at the forefront of the international fiduciary industry. A Unique Environment The Island of Guernsey, with a population of 60,000, is the second largest of the Channel Islands, situated in the English Channel west of the Normandy peninsula. Guernsey has its own government and legislature, making its own laws including laws relating to taxation. WHY USE GUERNSEY? Our Track Record Continued success Guernsey s fiduciary services sector has successfully grown during the past 50 years. The highest reputation and standards Trust and Corporate services business can be transacted with confidence in Guernsey as the Island has been scrutinised and recognised by the International Monetary Fund and the Financial Action Task Force. A Positive Environment For Fiduciary Services Pragmatic regulation The Guernsey Financial Services Commission promotes a robust yet pragmatic regulatory regime and is renowned for being approachable, accessible and open to new ideas. Innovative legislation Modern legislation remains advanced through continuous improvement, allowing practitioners access to the most comprehensive range of products when offering client solutions. Company law permits limited partnerships, Protected Cell Companies, Incorporated Cell Companies which are becoming increasingly popular in the wealth management sphere and the amalgamation and migration of companies. Competitive tax environment Non-Guernsey income (and Guernsey bank interest) accruing to Trusts that have no Guernsey beneficiaries is not subject to Guernsey income tax and as from 2008, there is a zero rate for corporate entities. There is no withholding tax on dividends paid, no capital gains tax, no death duties, inheritance tax or VAT. Skilled workforce With over 50 years to build expertise, the Island has a good pool of experienced and well qualified staff. 3

6 4 Inside Le Dehus Dolmen

7 Conveniently located The Island s location between Europe and the UK places it in a time zone between the US and the Far East. This makes Guernsey a convenient place to carry out business with many different countries. Travelling to the Island is also quick and easy as there are frequent air and sea links to both Europe and the UK, with a flight time from London taking less than an hour. A one day business solution Guernsey has a broad-based financial services industry (including support services) and all of the Island s businesses and key institutions are in close proximity to each other so an extensive array and high volume of business can be carried out face-to-face and in a short amount of time. Common Customs Area and Common External Tariff without all the implications of operating from a full member of the EU. For example, directives such as those on fiscal harmonization, financial services and company law do not have effect in Guernsey. Stability Continuity within Guernsey s democratic government offers political and economic stability and thereby a safe and secure environment on which business can rely. Independence Legislative and fiscal independence allows the Island to respond quickly to the needs of business. Highly developed business support infrastructure Carrying out business in Guernsey is quick and easy because the Island has a high quality infrastructure, including a newly upgraded first class telecommunications network that is unsurpassed offshore. Special relationship with the EU Businesses based on the Island have the advantages of being in a jurisdiction that is within the 5

8 The principal uses of an Offshore Trust are as a means of protecting assets. Trust Synopsis The concept of a Trust originated under Anglo-Saxon law, but its usage has now spread worldwide. A Trust exists when a person (the Settlor) transfers assets to another person (the Trustee) who holds the legal title to assets (the Trust Fund) not for himself, but for the benefit of others (the Beneficiaries) in accordance with terms and conditions usually set down in writing in the form of a Trust Deed, and the relevant law where the Trust is based. Common reasons for its use by an individual are: Estate Planning - To enable property of all kinds, including land, to be held for persons who cannot themselves hold it, for example infants. To minimize the prospect of family property passing to those who may dissipate it. The Trust can enable such persons to benefit from the Trust property, but only under the control and direction of the Trustee. In some circumstances to make provisions for purposes, usually, but not necessarily, of a charitable nature. Flexibility Subject to public policy, wide scope is available in the drafting of the Trust Deed to enable it to meet the specific intentions of the Settlor and the ongoing needs of the Beneficiaries. Continuity Continuity is assured as the Trust property is able to remain within the Trust for the life of the Trust, which may be unlimited and span several generations, irrespective of the death of the Settlor. Security Subject to the relevant law and the terms of the Trust Deed, a Trust can be mobile and allow for changes in the jurisdiction in which it is administered and the laws to which it is to be subject. Taxation A properly structured Trust put in place with appropriate legal and tax advice can legitimately reduce or completely avoid tax in appropriate circumstances. Purpose Trusts Purpose Trusts can be used for a variety of transactions, including ownership of private Trust companies, securitization structures and special purpose vehicles. The most common type of Trust is the Irrevocable Discretionary Trust. Other forms include Fixed or Strict Trusts such as Accumulation and Maintenance Trusts for the benefit of minors and to provide specific tax mitigation. 6

9 Pembroke Bay on the North Coast SEQUENCE OF EVENTS Anyone who is legally competent and not an undischarged bankrupt may create a Trust, subject to any restrictions that may be imposed by a country of residence or domicile. The tax implications of establishing a Trust vary with individual circumstances and it is important for each individual to seek professional advice in order to clarify their own tax and legal position before proceeding. After discussion or correspondence, a Trust Deed will be prepared which may contain the following information: (a) The name of the Settlor and Beneficiaries. (b) A description of the initial assets settled by the Settlor. (c) A statement of the Trusts upon which the assets settled are held. It is preferable for a Trust Deed to be drafted to give the Trustees the greatest degree of flexibility and powers in the administration of the Trust Fund. The duration of a Guernsey Trust may be unlimited and specific Trust legislation has been enacted which provides, amongst other provisions, that a Trustee must exercise diligence and integrity and act in the best interests of the Beneficiaries. Non Resident Guernsey Trusts are generally free of local taxation and there is no requirement to register or record the relevant Trust Deeds with any authority. FNB International Trustees will arrange for the drafting of Trust documentation. A Trust becomes effective once the documents have been signed by the Trustee (and the Settlor where he is a named party to the document) and the initial property to be settled has been conveyed to the Trustees. In making the transfer of assets to the Trustees, the Settlor is effectively making a gift of those assets, and as a consequence, ceases to have any proprietary interest in them (subject to the Laws to which the Settlor is subject). Accordingly, they no longer form part of the Settlor s estate. On the death of the Settlor, they continue to be held in the Trust. When a Settlor creates a Trust, he relies to a very high degree on the integrity of the Trustee. In some cases the Settlor may wish to have the additional comfort of appointing a Protector who has the Settlor s confidence and invariably has knowledge of the Beneficiaries. In a Discretionary Trust it is possible to appoint such a Protector. This in effect means that the Trustees refer to the Protector before they exercise particular discretionary powers. The Protector can be a family member, friend or lawyer, for instance. 7

10 Any Questions? A list of the most frequently asked questions by persons considering setting up a Trust. 1. What is a Settlor? A Settlor is the person or persons who establish or set up the Trust. 2. Can the Settlor also be a Beneficiary? Yes it is possible and indeed common for the Settlor or Settlors to also be Beneficiaries of the Trust. 3. What assets can be placed in the Trust? Almost any type of asset that can be owned individually can also be owned by a Trust structure. In some cases certain assets such as real estate or yachts may need to be owned through a Company, which in turn is owned by the Trust. 4. What type of Trust do I need? This will depend on your individual circumstances and will be determined after taking suitable legal and tax advice. In most cases, however, the Discretionary Trust is the most widely used and flexible Trust available. 5. What is a Discretionary Trust? A Discretionary Trust is a wide ranging and flexible structure which can hold most types of assets. It gives wide ranging administration powers to the Trustee, which enables flexibility to meet the needs of the Beneficiaries. 6. Can I keep control of the Trust assets after setting up the Trust? Once assets have been placed into a Trust, they are under the administrative control of the Trustee and the Settlor has no legal ownership or control of the assets. 7. How can I influence what happens in the Trust? At the time of establishment of the Trust, the Settlor will indicate to the Trustee what the purpose of establishing the Trust is and who are intended to be the Beneficiaries. This will be recorded by the Trustee who will have regard to it in administering the Trust. In addition, the Settlor is invited to submit a letter or memorandum of wishes from time to time which may record any of the Settlor s ongoing wishes for the administration of the Trust. Whilst this is not a legally binding document, the Trustee will naturally have regard to it in the consideration of its Trustee powers and in the exercise of its discretion under the terms of the Trust Deed. 8. Who will be the Trustee? The Trustee will usually be a Corporation licensed to provide Fiduciary and Trust services, such as FNB International Trustees. 9. Why is the Trustee a Corporation? A Corporation, which is licensed in Guernsey, provides financial strength, continuity and the security that the Trust is being administered by a professional and competent institution which has proper checks and balances and is audited by an independent auditor. 8

11 Statues at The Farmhouse 10. Can anyone be a Settlor? Yes, anybody who is over the age of 18 so long as they are not an undischarged bankrupt may be a Settlor. Anybody who is an undischarged bankrupt may not be a Settlor. 11. Can a Trust help my personal tax position? In many cases, a Trust can be used to improve a personal or family tax situation. This will, however, depend upon the individual circumstances of the Settlor and Beneficiaries and it is important that legal and tax advice is taken prior to the establishment of a Trust to ensure that best advantage is taken of any tax planning opportunities. 12. Will I be kept informed of any activity in the Trust? Yes, the Trustee will account to the Beneficiaries on a regular basis usually quarterly or six monthly, as to the asset value of the Trust. Under Guernsey s Trust Law, a Settlor may legally reserve some powers under the Trust, which may allow the Trustee to report certain aspects of the Trust administration to them. The Trustee will also wish to meet the Beneficiaries on a regular basis, usually annually to discuss any matters of interest in the administration of the Trust. The Trustee will, however, consider the ongoing needs of all Beneficiaries prior to the exercise of its discretion. 14. What happens if I change my mind or the family circumstances change? During their lifetime, a Settlor can indicate to a Trustee either during a meeting or through a letter to the Trustee, any change in the family circumstances that the Trustee would need to consider when administering the Trust. Such changes may take the form of providing additional benefit for a child who has special needs and requires greater benefit from the Trust or perhaps that the Trust be terminated if ongoing tax or legal advice indicates that it would be in the interest of the Beneficiaries. 15. What is the legal position? FNB International Trustees is regulated by the Guernsey Financial Services Commission and is subject to Guernsey Trust Law and Courts. A Trust can protect the Settlor s assets from third party creditors as the assets are owned by the Trustee and not the Settlor or Beneficiaries. This may be challenged if the Trust was created by the Settlor with the intention of avoiding known creditors. Only Beneficiaries can benefit from the assets of the Trust. 13. What happens after I die? The Trustee will continue to administer the Trust in the best interests of the Beneficiaries. In doing so, they will consider the terms of the Trust and any discussions held with the Settlor before their death as well as any wishes left by the Settlor to indicate how they envisaged the Trust to be administered. 9

12 10 Loop-Holed Tower with cannon at Rousse

13 Guernsey has recently modernised its company laws, The Companies (Guernsey) Law 2008, to meet the requirements of the finance sector. Guernsey maintains an independent legal system. Company Synopsis An offshore company is quite simply one which is established in one of the offshore jurisdictions. In the same way as any company, it will have a registered office, directors, company secretary and will be required to keep proper records of its activities in the form of accounting records and statutory books and file the requisite annual returns and other statutory documentation required by the particular jurisdiction in which it is based. INCORPORATION Recent amendments to Guernsey company laws and registry allow a company to be formed online within a few hours, if required by a licensed fiduciary, such as FNB International Trustees. Once the company is incorporated, a Certificate of Incorporation is provided, which is conclusive evidence of incorporation. Memorandum and Articles of Association (by-laws) are adopted by every company and these can be tailored to suit individual circumstances. DIRECTORS AND OFFICERS Companies are normally required to have at least two Directors and a Company Secretary. There is no legal requirement for Directors or Officers to reside in Guernsey. Similarly, there is no requirement for all Directors meetings to be held in Guernsey, although this would be preferable. It should be noted that FNB International Trustees would in all but the most unusual circumstances wish to be appointed as the Directors and Officers of the company in order to ensure control of the affairs of the company as required by our local regulatory body. 11

14 12 Fishing nets and buoys

15 The newly incorporated company must have its registered office in Guernsey, at which must be maintained a Register of Directors, Shareholders and Secretaries, together with copies of Annual Returns, and be available for inspection. Minutes of general meetings must also be kept at the Registered Office. Every company is required to keep accounting records, which must be sufficient to identify the transactions of the company and disclose with reasonable accuracy the financial position of the company. Accounts must be prepared in accordance with generally accepted accounting principles and show a true and fair view of the profit and loss of the company and the state of its balance sheet. The Directors are responsible for the preparation of Accounts for each financial period which, subject to transitional exceptions, may not exceed 18 months. There are no statutory requirements for the filing of financial accounts in Guernsey. TAXATION Guernsey companies owned by by non residents do not pay any tax in Guernsey. USES OF AN OFFSHORE COMPANY - Trading activities - Asset holding (residential or commercial property / yachts / aeroplanes etc). - Investment holdings (portfolios of stocks and shares etc). - Consultancy services. - Ownership of intellectual property rights, image rights etc. - Financing. OTHER JURISDICTIONS Although Guernsey is our jurisdiction of choice, we also offer the service of incorporating and managing companies in other jurisdictions such as Jersey or the British Virgin Islands. 13

16 14 The Vegetable Market roof, St. Peter Port

17 Provident Funds and Savings Plans A well structured Provident Fund / Savings Plan can be particularly beneficial for employers who want to retain key staff and be seen to promote not only a savings and retirement culture, but encourage motivation and retention. The plan consists of the following basic elements: Discretionary Trust Scheme Rules Trustee Protector / Committee The Discretionary Trust covers the wide ranging provisions of the Scheme, which are more clearly defined in the Scheme Rules. The Scheme Rules will specifically set out such items as the length of service required to qualify for retention of benefits, whether there will be employers and employees contributions, what happens in the event of death in service, redundancy, dismissal or retirement, what the retirement age is and any other number of items including what the position is in the event of termination of employment. It will also cover the investment options available. The employer will typically set up the Scheme by completing an application form, which the Trustee then turns into a set of Scheme Rules and a Discretionary Trust Deed, in conjunction with local Guernsey advocates, which meets the needs of the employer. The employer will typically nominate a Protector or, more usually, a Committee to advise the Trustee. This will typically consist of elected nominees of the employer such as the Finance Director and the Managing Director, although the choice of constitution of the Committee is at the discretion of the employer. It is possible for the employer to set up the Scheme in such a way that any employer s contributions into the Scheme can be taken to be first and foremost in satisfaction of any legal obligation. 15

18 16 Cliff path directions

19 To ensure attraction and retention of key staff and as part of a succession planning programme, to motivate higher performance and profitability or to reward performance. Simplicity and Choice It is usual for the administration department of the employer company to liaise closely with the Trustee in advising of any new joiners to the company and the details of their subscriptions and benefits. This department will also advise them of any leaving members, death in service etc to enable the Trustee to pay out or make any necessary payments from the Scheme. The Trustee will normally wish to appoint an Investment Manager to provide investment advice to the Trust Scheme. Typically, the Trustees in conjunction with the employer or the Committee will seek to have a range of investment options available to employees which typically consists of a conservative, balanced and high growth portfolio. This ensures the employer and employee can match the suitability of the investment chosen to the needs of the employee and keeps matters as simple as possible by restricting the investment choices to a small number of options. It is necessary to have due diligence provided for all new and existing members of the Scheme, which typically can be provided by the administration department of the employer company. 17

20 18 A local speciality

21 Sharing the Rewards Employee Share Option Scheme PURPOSE The purpose of an Employee Share Option Scheme is to provide an employer with the means of recruiting, incentivising and retaining chosen members of staff by issuing them with current or future allocations of shares in their employment company. This may be to ensure attraction and retention of key staff and as part of a succession planning programme, to motivate higher performance and profitability or to reward performance. In the interests of providing good corporate governance and ensuring the employees can have confidence in their interests being handled by a professional and impartial administrator, it is usual to appoint an independent Trustee to administer the Scheme and base the Scheme in a well regulated and reputable jurisdiction with the expertise to meet the needs of the Scheme, the employer and employees. BASIC STRUCTURE OF THE SCHEME An Employee Share Option Scheme is established in Guernsey. Documentation will be drawn up and will consist of the following: i) Trust Deed ii) Scheme Rules The Trust Deed will set out the various powers, duties and obligations of the Trustee in administering the Scheme. The Scheme Rules will set out specific details such as: - will there be an internal market for issuing and selling the shares? - the valuation method for the shares. - the vesting details for employees to qualify for their share allocation. - what happens in the event of death in service, resignation, redundancy or dismissal? - what happens in the event of a stock market listing or sale of the company? - the rights and obligations of shareholders and option holders. ADMINISTRATION Once in place, it is usual to have a Remuneration Committee responsible for deciding the basis of issuance of share options and communicating this to the Trustee which, in turn, will issue a letter to the employee setting out their allocation and vesting details. The Trustee keeps the records and is then responsible for safeguarding and carrying out the terms of the Trust and offers to employees. In the event of an employee leaving for whatever reason, the Trustee determines whether any shares vest or are forfeited by the employee in accordance with the terms of their offer letter and the Scheme Rules. Likewise, in the event of the sale of the company or a stock market listing, the Trustee will act in accordance with the Scheme Rules in ensuring the interests of the employees are protected. 19

22 20 Tractor at Portelet Bay

23 QROPS (Qualifying Recognised Overseas Pension Scheme) WHAT IS A QROPS? In April 2006, the UK Tax Authorities (HMRC) amended pension legislation to allow an individual with a UK pension pot to transfer it to a QROPS Scheme. To be approved as a QROPS, the Scheme must adhere to certain requirements set out by HMRC, the most important of which is that a minimum of 70% of the assets must be maintained within the Scheme to provide a pension for the individual for life. WHO CAN BENEFIT FROM A QROPS? Anybody who has a UK pension pot who is no longer tax resident in the United Kingdom. Examples would be British nationals who have retired overseas and who do not intend to return to the UK or foreign nationals who have worked in the UK and accumulated UK pension pots who have subsequently left the UK. WHAT ARE THE BENEFITS? There are powerful benefits, most notably:- WHAT IS THE RETIREMENT AGE? The retirement age can be any age from 55 to 75 depending on your particular circumstances. HOW DO I SET UP A QROPS? Your financial advisor will assist you in approaching your UK pension providers to obtain valuations and any transfer documentation which needs to be completed. The pension providers will want to see the QROPS approval prior to making any transfer. In addition, you will need to sign application forms and provide the usual due diligence. WHO WILL BE THE INVESTMENT ADVISERS? Your financial adviser will make all the arrangements and give you advice on the suitability of transfer for your particular circumstances. They will also make investment recommendations and can be the investment advisers to the funds in the QROPS provided they are suitably qualified to do so. All Images courtesy of VisitGuernsey Funds in the Scheme are not subject to any UK tax at source allowing the investments to grow tax free. Tax is not deducted at source from pension payments. However, you may be liable to tax on distributions in your country of residence. There are wide investment options. Up to 30% can be taken as a lump sum on your chosen retirement date. You do not have to buy an annuity on retirement. This not only avoids having to lock into a potentially poor annuity return, especially in the current low interest market, but also means that on your death, the funds remaining are available for transfer to your chosen beneficiaries. There is no tax on death in Guernsey. Tax on funds retained in the UK is currently 55%. WHAT ASSETS CAN BE TRANSFERRED TO A QROPS? Most UK pension schemes (other than the State pension) can be transferred to a QROPS, including in most cases protected rights. WHAT IS THE TAX POSITION? There is no tax of any sort levied in Guernsey on either the fund or any distributions from the fund. Once transferred to a QROPS, there are no UK taxes. UK tax will only be paid if you are resident in the UK for any tax year in which a distribution is made to you. Tax may be payable on distributions in your country of residence. You must take advice in this regard. DO THE TRUSTEES HAVE TO REPORT DISTRIBUTIONS TO HMRC? Yes, for the first 5 years that you are out of the UK but not after that unless you return to take up residence in the UK. THE PLAIDERIE PENSION SCHEME The Plaiderie Pension Scheme is fully QROPS approved by HMRC No and administered by FNB International Trustees. 21

24 FNB International Trustees Limited PO Box 602 La Plaiderie House St Peter Port Guernsey GY1 4NL Channel Islands T F enquiries@fnbit.com Website FNB International Trustees Limited is licensed by the Guernsey Financial Services Commission to conduct fiduciary business. A member of the FirstRand Group. Registration no