Proposed changes to the law on trusts aim to stop the island losing business to our competitors.
MHKs voted unanimously to give the Trusts (Amendment) Bill its second reading in the House of Keys.
Treasury member Bill Henderson said the amendments involved abolition of the law requiring there must be two trustees when land is sold. Other amendments will see the 150-year perpetuity period scrapped while the law to protect local trusts against outside court orders will be strengthened.
The aim is to make the island more competitive and on a level with other jurisdictions such as the UK, Ireland and the Channel Islands. Mr Henderson told MHKs: ‘The amendments are modest and conservative’.
Mr Henderson explained the concept of a perpetuity period was introduced in the 17th century with the aim of preventing too much money being tied up for too long in too few hands.
He said a settlor who has ‘made a pot of money’ he wants to leave to his descendants would likely choose to create a trust in Ireland, Jersey of Guernsey as these jurisdictions don’t still have a perpetuity period in place. Mr Henderson said while it’s unlikely a trust will last in perpetuity, nevertheless the perception exists that it would.
‘The island is losing business. This is a good reason for seeking to abolish the perpetuity period – it’s a business friendly initiative,’ he said.