The COVID-19 pandemic has raised immediate issues for many wealthy families, notably around tax residency and immigration, but on the flip side it has given wealthy families the opportunity to take stock and consider how they want to be structured and, fundamentally, where they want their family office to be located. This article considers the features which make Jersey attractive for family offices.
The Taxation (Companies – Economic Substance) (Jersey) Law 2019 came into effect in January 2019 and applies to certain Jersey tax-resident companies which conduct one or more relevant activities. Family office structures which include Jersey tax-resident companies must consider whether those companies fall within the scope of the law. If they do, they must satisfy the three-stage test set out in the law or face a number of progressively punitive penalties.
Wealth is increasing exponentially among some of the world's richest families to the extent that, for many of these families, it makes commercial sense to set up their own bespoke family office to look after their key operations – and they are increasingly looking to Jersey as the place to do it. There are a range of factors as to why Jersey is becoming a jurisdiction of choice for families across the world looking to set up such an operation, including global economic shifts and Jersey's expertise and personnel.
It is fair to say that the term 'asset protection trust' has developed as an informal description of a trust, the primary purpose of which is to safeguard trust assets from claims made by creditors and others usually against the settlor or beneficiaries of a trust. This article discusses what an asset protection trust is and what, over and above a normal trust, it is seeking to achieve. It also considers to what extent a Jersey trust, once established, will protect assets from creditor claims.
The next phase of the Charities (Jersey) Law 2014 was enacted on May 1 2018, allowing entities to finally register as charities under the law. The remaining provisions of the law are expected to come into force on January 1 2019, which will amend Jersey taxation legislation in relation to charities. This is an exciting opportunity for Jersey to reinforce and develop its status as a centre of excellence for philanthropy both in private wealth management and impact investing.
According to a 2016 report, 212,615 individuals in the world hold a total of over $30 trillion in wealth. By 2020 the number of ultra-high-net-worth individuals is anticipated to reach 318,000 with compound annual growth of 9%. It seems clear that clients will continue to want structuring options in stable and established jurisdictions. This means that Jersey remains an attractive proposition for Middle East and Far East ultra-high-net-worth individuals.