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British Virgin Islands

TRUSTEE ORDINANCE, 1961

PART VIII Special Provisions

80. (1) The proper law of a trust or a particular aspect of a trust is

(a) the law of the jurisdiction expressly designated by the terms of the trust as being the law that is to govern the trust or the particular aspect of the trust, as the case may be;

(b) if the terms of the trust do not expressly designate the governing law for the trust or the particular aspect of the trust, then the law of the jurisdiction that may reasonably be inferred from the terms of the trust as being the law that is to govern the trust or the particular aspect of the trust, as the case may be; or

(c) if the terms of the trust do not expressly designate the governing law for the trust or the particular aspect of the trust and no reasonable inference may be drawn from the terms of the trust as to the governing law, then the law of the jurisdiction with which the trust at the time it was created had the closest connection.

(2) for the purposes of paragraph (c) of subsection (1) in ascertaining the law with which a trust is most closely connected at the time it was created reference shall be made in particular to

(a) the place of administration of the trust designated by the settlor;

(b) the situs of the assets of the trust;

(c) the place of residence or business of the trustee; and

(d) the objects of the trust and the places where they are to be fulfilled.

81. (1) If the terms of the instrument creating a trust so provide, the proper law of the trust may be changed from the law of the Territory to the law of another jurisdiction, or from the law of another jurisdiction to the law of the Territory, provided that in the case of a change from the law of the Territory the new proper law would recognize the validity of the trust and the respective interests of the beneficiaries.

(2) A change in proper law shall not affect the legality or validity of, or render any person liable for, anything done before the change.

(3) Without limiting or affecting subsection (2), the instrument creating a trust may provide that

(a) the proper law be changed to that of any other jurisdiction specified in the trust; or

(b) the trust assets be transferred to a trustee in that other jurisdiction, upon the occurrence of an event specified in the trust instrument.

82. The court has jurisdiction where

(a) the proper law of a trust or a particular aspect of a trust is the law of the Territory;

(b) the trustee of any trust is resident in the Territory;

(c) in the case of a corporate trustee of any trust, it is incorporated or registered to do business in the Territory;

(d) any trust property is situate in the Territory but only in respect of property so situate;

(e) the administration of any trust is carried on in the Territory; or

(f) the court thinks it appropriate.

83. (1) If a person transfers or disposes of personal property to the trustee of a trust

(a) he shall be deemed to have had capacity to do so if he is at the time of such transfer or disposition of full age and of sound mind under the law of his domicile; and

(b) no rule relating to inheritance or succession of the law of his domicile shall affect any such transfer or disposition or otherwise affect the validity of such trust.

(2) For the avoidance of doubt it is declared that the provisions of this section shall apply notwithstanding any other provisions of this Part and shall apply only to transfers or dispositions of property made to a trustee of a trust after commencement of this Part, but this declaration shall be without prejudice to the validity or otherwise of transfers or dispositions made before that time.

84.(1) For the purpose of this section (a) “designated person” means

(i) a barrister or solicitor practising in the Territory,

(ii) an accountant practising in the Territory who qualifies as an “auditor” for purposes of the Banks and Trust Companies Act, 1990,

(iii) a licensee under the Banks and Trust Companies Act, 1990, or

(iv) such other person as the Minister of Finance may by order designate, and

(b) “trust for any purpose” means a trust other than a trust

(i) that is for the benefit of particular persons whether or not immediately ascertainable, or

(ii) that is for the benefit of some aggregate of persons ascertained by reference to some personal relationship.

(2) A person may create a valid trust for any purpose, whether charitable or not, if

(a) the purpose is specific, reasonable and possible;

(b) the purpose is not immoral, contrary to public policy or unlawful;

(c) at least one trustee of the trust is a designated person;

(d) the trust instrument appoints a person, who may be a protector, to enforce the trust and provides for the appointment of a successor to such person;

(e) the person appointed to enforce the trust is a party to the trust instrument or consents in writing, addressed to the trustee who is a designated person, to enforce the trust; and

(f) the trust instrument specifies the event upon the happening of which the trust terminates and provides for the disposition of surplus assets of the trust upon its termination.

(3) The rule against perpetuities and remoteness of vesting shall not apply to a trust to which subsection (2) applies.

(4) Nothing in this section shall affect the existing law with respect to trusts established for charitable purposes.

(5) Where a trustee who is a designated person has reason to believe that a person who is appointed to enforce the trust is dead, is unwilling, refuses or is unfit to act or is incapable of acting, then that trustee shall as soon as practicable inform the Attorney General in writing of the fact and send him a copy of the instrument creating the trust, together with all relevant documents attesting to the viability of the designated person to act.

(6) The Attorney General on being informed under subsection (5) shall within 90 days apply for the appointment of a person to enforce the trust and the court may, unless it feels that the person is not fit, by order declare that person to be the person to enforce the trust.

(7) The order of the court under subsection (6) is conclusive evidence of the appointment of the person to enforce the trust and the appointment takes effect as from the date of the order.

(8) Where any costs are incurred by the Attorney General in connection with any application under subsection (6), the court may make such order as it considers just as to the payment of those costs out of the assets of the trust.

(9) Where a designated person fails to comply with subsection (5), then, subject to subsection (10), the designated person is guilty of an offence and is liable of summary conviction to a fine of not more than $5,000.

(10) It shall be a defence to a charge of committing an offence under subsection (9) to prove that the designated person took all reasonable steps and exercised all due diligence to avoid committing the offence.

(11) The person appointed pursuant to paragraph (d) of subsection (1) shall be entitled, in addition to any documents, information or other rights specifically provided for in the trust instrument, to

(a) annual accounts of the trust;

(b) copies of the trust instrument and deeds and other written instruments executed pursuant to the trust instrument; and

(c) counsels’ opinions and legal advice received by the trustees.

85. (1) Subject to any provision contained in the instrument creating the trust,

(a) every decision made, resolution passed or power or discretion exercised by trustees is valid if made, passed or exercised by a majority of the trustees if there are more than 2 of them; and

(b) any deed or other instrument executed pursuant to such a decision, resolution or exercise of power or discretion is likewise valid as if it had been executed by all the trustees.

(2) This section shall not apply to trusts in existence at the time the section comes into effect.

86. (1) An instrument creating a trust may contain provisions by virtue of which the exercise by the trustees of any of their powers and discretions shall be subject to the previous consent of the settlor or some other person, whether named as protector, nominator, committee or any other name; and if so provided in the instrument creating the trust the trustees shall not be liable for any loss caused by their actions if the previous consent was given.

(2) There may be conferred on the settlor or some other person, whether named as protector, nominator, committee or by any other name, by the instrument creating the trust, any powers, and without limitation to the foregoing power may be conferred on that person to do any one or more of the following:

(a) determine the law of which jurisdiction shall be the proper law of the trust;

(b) change the forum of administration of the trust;

(c) remove trustees;

(d) appoint new or additional trustees;

(e) exclude any beneficiary as a beneficiary of the trust;

(f) include any person as a beneficiary of the trust in or in addition to any existing beneficiary of the trust; and

(g) withhold consent from specified actions of the trustees either conditionally or unconditionally.

(3) A person exercising any of the powers set forth in paragraphs (a) to (d) and (g) of subsection (2) shall not by virtue only of the exercise of the power be deemed to be a trustee; and unless otherwise provided in the instrument creating the trust, is not liable to the beneficiaries for the bona fide exercise of the power.

87. A trust instrument may contain provisions by virtue of which the exercise of any of the trustee’s powers may be reserved to a managing trustee, and no other trustee is liable for any of the decisions, acts or transactions of the managing trustee in so far as they amount to exercise of powers reserved by the trust instrument to the managing trustee.

88. In the absence of any contrary provisions in the trust instrument, a successor trustee may exercise all powers and discretions granted to the original trustee including, without limitation, any power to select from a class of beneficiaries those persons entitled to income or principal of the trust fund.

89. A trust may be revoked or amended only to the extent and in the manner expressly stated in the trust instrument or as provided by section 58.

90. (1) Notwithstanding any provisions of the Income Tax Act, the income of any trust in the hands of a trustee is exempt from income tax and the beneficiaries of any trust who are not persons resident in the Territory shall likewise be exempt from payment of income tax in respect of any moneys received by them from the trustee of any trust.

(2) No estate tax, inheritance tax, succession tax, gift tax, rate, duty, levy or other charge is payable by beneficiaries who are not resident in the Territory in respect of any distribution to them by the trustee of any trust.

(3) Notwithstanding any provision of the Stamp Act, any trust that does not have as beneficiaries persons resident in the Territory shall be exempt from the payment of stamp duty with respect to

(a) the deed or other written instrument creating the trust;

(b) all deeds and other written instruments of appointment made pursuant to the trust;

(c) all deeds and other instruments by which assets are transferred to or from the trustee of a trust; and

(d) all instruments relating to the transfer of beneficial interests in a trust.

(4) The exemptions in this section do not apply to any trust which

(a) has as an underlying asset land in the Territory; or

(b) carries on a business or trade in the Territory.

(5) The provisions of this section apply to all trusts in existence at the time of the coming into operation of this Act.

91. (1) Notwithstanding any provisions of the Registration and Records Act,

(a) any deed creating a trust;

(b) all deeds of appointment made pursuant to the terms of a trust; and

(c) all other deeds executed by the trustee, settlors, beneficiaries or protectors of a trust pursuant to the powers and discretions specified in the instrument creating the trust,

are exempt from registration under the provisions of the Registration and Records Act.

(2) The exemption granted by subsection (1) applies to all deeds referred to therein executed prior to the time when this provision becomes effective.

92. (1) Every trust instrument of which the proper law is the law of the Virgin Islands and which does not create a bare trust shall be liable to a duty called “the trust duty” in the sum of $50.00.

(2) The payment of the trust duty shall be denoted or expressed by the affixing of a revenue stamp to the trust instrument.

(3) A trust instrument shall be deemed to be duly stamped only when the person executing the trust instrument cancels the revenue stamp by writing on or across the stamp the name or initials of the trustee or the person acting on behalf of a corporation trustee, as well as the date on which the name or initials of the person is affixed.

(4) A trust instrument not cancelled in accordance with the provisions of subsection (3) above shall not be admissible in civil proceedings, provided that a trust instrument may in the discretion of the Court be admissible in processing on proof of the payment in the manner prescribed by the Governor in Council of the trust duty together with a penalty in the sum of $100.00 for each calendar year from the execution of the trust instrument.

(5) The provisions of this section shall apply only to trusts created after the coming into effect of this section.

(6) Any trust instrument that is liable to trust duty shall not be produced to the Treasury, Post Office or any other public body for purposes of payment of trust duty.

(7)No trust instrument of which the proper law is the law of the Territory and of which a designated person is a trustee shall, except in criminal proceedings, be pleaded or given in evidence, or admitted to be good, useful or available in law or equity, unless it is duty stamped with trust duty in accordance with the law in force at the time when it was first executed.

(8) Any unstamped or insufficiently stamped trust instrument that is liable to be stamped pursuant to the provisions of this section may be pleaded or given in evidence or admitted to be good, useful or available in law or equity upon payment of the trust duty together with a penalty in the sum of $100.00 for each complete calendar year from execution of the instrument.

(9)The penalty referred to in subsection (8) shall be paid in such manner as the Governor in Council may by order direct.

(10)This section applies only to trust instruments created after the section comes into effect.

(11) This section comes into operation on such date as the Governor may appoint by proclamation published in the Gazette.