Private Trust Companies (‘PTC’) are becoming a popular choice in relation to trust formation.
Corporate Trustees are required to be licensed on the Isle of Man. However, a PTC is able to take advantage of exemptions by virtue of the Financial Services (Exemptions) Regulations 2011. This means a PTC may act as a Trustee without further authorisations required, provided it is operated by an Isle of Man licenceholder and does not undertake any other activities other than acting as Trustee.
A PTC is incorporated in the same way as a regular Isle of Man Company. The PTC may be used to act as Trustee for a number of Trusts within a family. This can be particularly helpful where different Trusts are required for different purposes within the same group or family. For instance, one Trust may be used to hold investments, one for the family properties and so on. It is attractive that the same Trustee entity can be used solely for the use by the one group. It simplifies banking arrangements, compliance requirements and streamlines the structure.
Whilst the day to day control of the PTC should rest with individuals outside the family and their jurisdiction, it is possible that the ownership of the PTC may rest with family members. This can give comfort to individuals that wish to retain an element of control, although it would not be usual for the Settlor to have any involvement in the ownership of the PTC Equally the ownership of the PTC may be with a purpose trust.
The benefits to using this kind of structure are numerous:
- Streamlined cost saving benefits;
- The Trusts can be structured to suit individual family needs;
- Assets can be separated into different Trusts according to type and families or charities to benefit;
- Assets in the Trusts remain under the control of the PTC;
- Local inheritance rules may be avoided along with complicated probate issues;
- Affords asset protection;
An increasing number of clients are choosing a PTC as a feasible option, given the flexibility and protection afforded by this type of structure.
For further detailed information on Isle of Man Companies, please click here.