Private Client 2018 7Th Edition

TheICLG International Comparative Legal Guide to: Private Client 2018 7th Edition

A practical cross-border insight into private client work

Published by Global Legal Group, in association with CDR, with contributions from:

Aird & Berlis LLP Maples and Calder Alon Kaplan, Advocate and Notary Law Office Matheson Aronson, Ronkin-Noor, Eyal Law Firm Miller Thomson LLP Arqués Ribert Junyer – Advocats MJM Limited Berwin Leighton Paisner LLP Mori Hamada & Matsumoto Bircham Dyson Bell LLP Mourant Ozannes Cadwalader, Wickersham & Taft LLP New Quadrant Partners Limited DORDA Rechtsanwälte GmbH O’Sullivan Estate Lawyers LLP Griffiths & Partners and Coriats Trust Company Limited Ospelt & Partner Attorneys at Law Ltd. Hassans International Law Firm P+P Pöllath + Partners Higgs & Johnson Rovsing & Gammeljord Holland & Knight LLP Society of Trust and Estate Practitioners (STEP) Katten Muchin Rosenman LLP Spenser & Kauffmann Attorneys at Law Khaitan & Co Studio Tributario Associato Facchini Rossi & Soci (FRS) Lebenberg Advokatbyrå AB Tirard, Naudin, Société d’avocats Lenz & Staehelin Vieira de Almeida Loyens & Loeff Withers Bergman LLP Macfarlanes LLP Zepos & Yannopoulos The International Comparative Legal Guide to: Private Client 2018

General Chapters: 1 BREXIT: The Immigration Implications – James Perrott, Macfarlanes LLP 1

2 Keep Calm and Carry On: The Increasing UK Regulatory and Tax Issues Facing Offshore Trustees – Matthew Braithwaite & Helen Ratcliffe, Bircham Dyson Bell LLP 11

3 Pre-Immigration Planning Considerations for the HNW Client – Think Before You Leap – Contributing Editors Jonathan Conder & Robin Joshua S. Rubenstein, Katten Muchin Rosenman LLP 17 Vos, Macfarlanes LLP 4 Best Interest – Conflict of Interest: The Fiduciary Rule and Financial Advisory and Financial Sales Director Planning Services – Margaret O’Sullivan, O’Sullivan Estate Lawyers LLP 23 Florjan Osmani Account Director 5 Family Asset Protection – the Latest Key Developments: Variation of Nuptial Settlements Oliver Smith and Family Companies Coming Under Further Attack in the Divorce Courts – Sales Support Manager Marcus Dearle & Jessica Henson, Berwin Leighton Paisner LLP 26 Toni Hayward 6 Navigating Complex US Immigration Laws: US Visas & Taxation – Mark E. Haranzo & Sub Editor Reaz H. Jafri, Holland & Knight LLP / Withers Bergman LLP 29 Hollie Parker Senior Editors 7 Philanthropy in Canada: New Rules and Opportunities – Elise Pulver & Rachel Blumenfeld, Suzie Levy Aird & Berlis LLP 34 Caroline Collingwood 8 Still a Good Bet? What You Need to Know Now About Investing in UK Residential Property – Chief Operating Officer Marilyn McKeever, New Quadrant Partners Limited 37 Dror Levy Group Consulting Editor 9 The Limits to Transparency – George Hodgson & Emily Deane TEP, Society of Trust and Alan Falach Estate Practitioners (STEP) 41 Publisher Rory Smith Country Question and Answer Chapters: Published by Global Legal Group Ltd. 10 Andorra Arqués Ribert Junyer – Advocats: Jaume Ribert i Llovet & 59 Tanner Street Jordi Junyer i Ricart 44 London SE1 3PL, UK Tel: +44 20 7367 0720 11 Austria DORDA Rechtsanwälte GmbH: Paul Doralt & Katharina Binder 54 Fax: +44 20 7407 5255 Email: [email protected] 12 Bahamas Higgs & Johnson: Heather L. Thompson & Kamala M. Richardson 60 URL: www.glgroup.co.uk 13 Belgium Loyens & Loeff: Saskia Lust & Nicolas Bertrand 66 GLG Cover Design F&F Studio Design 14 Bermuda MJM Limited: Hildeberto (“Hil”) de Frias & Jane Collis 76 GLG Cover Image Source iStockphoto 15 British Virgin Islands Maples and Calder: Ray Davern & Alex Way 84 Printed by 16 Canada Miller Thomson LLP: Nathalie Marchand & Rahul Sharma 89 Ashford Colour Press Ltd. December 2017 17 Cayman Islands Maples and Calder: Morven McMillan 97

Copyright © 2017 18 Denmark Rovsing & Gammeljord: Mette Sheraz Rovsing & Johan Hartmann Stæger 102 Global Legal Group Ltd. All rights reserved 19 France Tirard, Naudin, Société d’avocats: Jean-Marc Tirard & Maryse Naudin 108 No photocopying 20 Germany P+P Pöllath + Partners: Dr. Andreas Richter & Dr. Katharina Hemmen 116 ISBN 978-1-911367-88-8 ISSN 2048-6863 21 Gibraltar Hassans International Law Firm: Peter Montegriffo QC & Louise Lugaro 124 22 Greece Zepos & Yannopoulos: Costas Kallideris & Anna Paraskeva 132 Strategic Partners 23 Guernsey Mourant Ozannes: Matthew Guthrie & Sophie Denman 138

24 India Khaitan & Co: Daksha Baxi & Aditi Sharma 144

25 Ireland Matheson: John Gill & Lydia McCormack 153

26 Israel Alon Kaplan, Advocate and Notary Law Office: Alon Kaplan & Aronson, Ronkin-Noor, Eyal Law Firm: Lyat Eyal 161

27 Italy Studio Tributario Associato Facchini Rossi & Soci (FRS): Francesco Facchini & Stefano Massarotto 167

28 Japan Mori Hamada & Matsumoto: Atsushi Oishi & Makoto Sakai 176

29 Jersey Mourant Ozannes: Edward Devenport & Giles Corbin 183

Continued Overleaf

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720

Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

WWW.ICLG.COM The International Comparative Legal Guide to: Private Client 2018

Country Question and Answer Chapters:

30 Liechtenstein Ospelt & Partner Attorneys at Law Ltd.: Dr. iur. Alexander Wolfgang Ospelt & Mag. iur. Dr. iur. Sascha Kurt Brunner 191

31 Portugal Vieira de Almeida: Tiago Marreiros Moreira & Frederico Antas 198

32 Sweden Lebenberg Advokatbyrå AB: Torgny Lebenberg & Peder Lundgren 208

33 Switzerland Lenz & Staehelin: Heini Rüdisühli & Dr. Lucien Masmejan 214

34 Turks and Caicos Islands Griffiths & Partners and Coriats Trust Company Limited: David Stewart & Conrad Griffiths QC 224

35 Ukraine Spenser & Kauffmann Attorneys at Law: Tetyana Ivanovych & Tetiana Havryliuk 228

36 United Kingdom Macfarlanes LLP: Jonathan Conder & Robin Vos 235

37 USA Cadwalader, Wickersham & Taft LLP: William Schaaf & Sasha Grinberg 251

EDITORIAL

Welcome to the seventh edition of The International Comparative Legal Guide to: Private Client. This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of the laws and regulations of private client work. It is divided into two main sections: Nine general chapters. These are designed to provide readers with a comprehensive overview of key issues affecting private client work, particularly from the perspective of a multi-jurisdictional transaction. Country question and answer chapters. These provide a broad overview of common issues in private client laws and regulations in 28 jurisdictions. All chapters are written by leading private client lawyers and industry specialists and we are extremely grateful for their excellent contributions. Special thanks are reserved for the contributing editors Jonathan Conder and Robin Vos of Macfarlanes LLP for their invaluable assistance and STEP for their continued and valued participation in the guide. Global Legal Group hopes that you find this guide practical and interesting. The International Comparative Legal Guide series is also available online at www.iclg.com.

Alan Falach LL.M. Group Consulting Editor Global Legal Group [email protected] Chapter 29

Jersey Edward Devenport

Mourant Ozannes Giles Corbin

1 Connection Factors 1.5 To what extent is nationality relevant in determining liability to taxation in your jurisdiction?

1.1 To what extent is domicile or habitual residence relevant in determining liability to taxation in your jurisdiction? This is not relevant.

Domicile is not relevant for Jersey tax purposes. 1.6 If nationality is relevant, how is it defined for taxation A person ordinarily resident in Jersey is liable to Jersey income tax purposes? on their worldwide income. However, if the person is not ordinarily resident in Jersey, income which arises from sources outside Jersey This is not applicable. is chargeable to tax only on the amount of that income that is received in, or remitted to, Jersey. 1.7 What other connecting factors (if any) are relevant in determining a person’s liability to tax in your 1.2 If domicile or habitual residence is relevant, how is it jurisdiction? defined for taxation purposes? This is not applicable. There is no statutory definition of “resident” or “ordinary resident”, but guidance issued by the Jersey tax authority (the Comptroller of Taxes) indicates that the residence status of a person for the 2 General Taxation Regime purposes of Jersey income tax is dependent on the frequency of visits to Jersey and whether or not the person maintains a place of 2.1 What gift or estate taxes apply that are relevant to abode in Jersey. persons becoming established in your jurisdiction? If a person maintains a place of abode in Jersey which is available for the person’s own use, the person is regarded as resident for any None, save that a gift of Jersey immovable property is subject to year in which the person makes a visit, of whatever length, to Jersey. stamp duty, and probate duty may be applicable on estates (see A person is not regarded as resident in Jersey if the person maintains below). no place of abode in Jersey and visits Jersey only on an occasional (i.e. not habitual) basis. Visits to Jersey will not be regarded as 2.2 How and to what extent are persons who become occasional if they are for a period (or periods) equal in the whole to established in your jurisdiction liable to income and six months or more in the income tax year (beginning 1 January). capital gains tax? If a person does not maintain a place of abode in Jersey which is available for his own use, and stays in Jersey for less than six A person ordinarily resident in Jersey is liable to Jersey income tax months in any calendar year, the person will still be regarded as on worldwide income. becoming resident if he visits Jersey year after year (so that visits Income from offices and employment is assessable on an arising become in effect part of the person’s habit of life) and the annual basis. Income tax is levied on the assessable income of the visits are for a substantial period (or periods) of time. individual, less personal allowances and deductions, at a rate of 20%. 1.3 To what extent is residence relevant in determining Personal allowances for persons with incomes over £150,000 per liability to taxation in your jurisdiction? annum are very restricted. Dividends received from UK resident companies do not qualify See question 1.1. for double tax relief and individuals are taxed on the net amount received. 1.4 If residence is relevant, how is it defined for taxation Generally speaking, Jersey companies are liable to income tax at the purposes? rate of 0% but certain companies which are regulated by the Jersey Financial Services Commission are taxed at 10% (this is known as See question 1.2.

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the “Zero/Ten” tax treatment). Jersey utility companies are liable to There are no gift taxes in the Bailiwick of Jersey other than a stamp income tax at the rate of 20%. duty liability in the case of gifts of Jersey immovable property. There is no system of capital gains tax in Jersey. There is also stamp duty payable before the grant of probate or letters of administration, which starts at 0.5% and rises to 0.75% in respect of Jersey movable property in the estate of a deceased 2.3 What other direct taxes (if any) apply to persons who become established in your jurisdiction? person, whether the person dies domiciled in Jersey or not. The maximum stamp duty liability in this regard is capped at £100,000. Planning to mitigate probate stamp duty can take place whether pre- The only form of direct taxation in Jersey is income tax. entry or not. Jersey 2.4 What indirect taxes (sales taxes/VAT and customs & excise duties) apply to persons becoming established 3.2 In your jurisdiction, what pre-entry income and capital in your jurisdiction? gains tax planning can be undertaken?

Jersey has a goods and services tax on the domestic consumption Subject to certain caps and lower limits, income tax in Jersey is of imported and Jersey-produced goods and services. This is paid levied at 20% with limited deductions and personal allowances. at 5% of their value at the time the goods or services are sold or There is a marginal rate of income tax at 26% applicable for exchanged or imported. There is also a customs and import duty individuals earning just above the annual exempt amount of £14,350 applicable on certain imports including fuel (but not marine fuel), (£15,900 for those aged 65 and over). The lower of the amount cigarettes and tobacco. assessable to tax under the 26% marginal tax calculation, and that payable under the normal 20% tax calculation rules, is payable. Wealthy individuals moving to Jersey who have been approved under 2.5 Are there any anti-avoidance taxation provisions that the Control of Housing and Work (Jersey) Law 2012 by Jersey’s apply to the offshore arrangements of persons who have become established in your jurisdiction? Population Office, may be permitted to pay income tax at the rate of 20% on the first £625,000 of annual worldwide income and 1% on all income over and above that amount, with the minimum annual No, but Article 134A (see question 2.6 below) could be applicable tax yield being £125,000. in certain circumstances. There are no capital gains taxes in Jersey.

2.6 Is there any general anti-avoidance or anti-abuse rule to counteract tax advantages? 3.3 In your jurisdiction, can pre-entry planning be undertaken for any other taxes? Under Article 134A of the Income Tax (Jersey) Law, 1961, Jersey has a widely drafted anti-abuse provision. There is an appeals Other than the taxes mentioned above, the only other tax for process. consideration is goods and services tax (see question 2.4 above).

2.7 Are there any arrangements in place in your 4 Taxation Issues on Inward Investment jurisdiction for the disclosure of aggressive tax planning schemes? 4.1 What liabilities are there to tax on the acquisition, Regulated expect service providers in Jersey (such as trust holding or disposal of, or receipt of income from companies) are expected by the Jersey Financial Services investments in your jurisdiction? Commission to ensure that they identify if any new business they take on will facilitate the use by their client of a tax avoidance If the assets or funds have the nature of income when they are scheme registered under the UK’s Disclosure of Tax Avoidance remitted to a Jersey tax payer, then the tax payer will be liable to Scheme (DOTAS), or are of the view that they are involved in a income tax on them. transaction which forms part of a scheme which has a DOTAS reference number, and document this accordingly (including 4.2 What taxes are there on the importation of assets into confirmation of compliance with DOTAS reporting requirements) your jurisdiction, including excise taxes? as part of their business take-on procedures. However, there are no disclosure requirements in Jersey in respect of such schemes. By virtue of the United Kingdom’s Treaty of Accession to the European Community, Jersey is within the Common Customs 3 Pre-entry Tax Planning Area and Common External Tariff of the European Union (EU), and so the EU’s rules on customs matters apply. Therefore, goods imported to Jersey from outside an EU country are subject to EU 3.1 In your jurisdiction, what pre-entry estate and gift tax rates. Equally, those in free circulation within the EU are imported planning can be undertaken? without customs charges, save as provided below. Jersey has a goods and services tax on the domestic consumption There are no capital gains, inheritance or wealth taxes in Jersey. of imported goods and services. This is paid at 5% of their value at There is a mandatory tax on the purchase of Jersey residential the time the goods or services are imported. There is also a customs property in accordance with the stamp duty sliding scale referred to and import duty applicable on certain imports including fuel (but in question 4.3 below. not marine fuel), cigarettes and tobacco and on the registration of vehicles.

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4.3 Are there any particular tax issues in relation to the 6 Tax Treaties purchase of residential properties?

6.1 Has your jurisdiction entered into income tax and Buyers of immovable (broadly meaning freehold) residential capital gains tax treaties and, if so, what is their property in Jersey pay stamp duty on an ascending sliding scale impact? subject to a qualifying first-time buyer discount applicable when purchasing a property under £400,000 (such discount threshold Jersey has double taxation arrangements (DTAs) with the UK and being reviewed annually). At the lower end of the scale, stamp duty Guernsey and a limited agreement with France. In addition, Jersey on a property valued between £50,000 and £300,000 is payable at

has entered into tax treaties with Malta, Estonia, Hong Kong, Qatar, Jersey £250 in respect of the first £50,000 plus 1.5% of each £100 or part Singapore, the Isle of Man and Luxembourg. Jersey recently signed of £100 in excess thereof. At the highest end of the scale, stamp DTAs with the Republic of Seychelles and the Republic of Rwanda. duty on a property exceeding £6,000,000 is payable at £367,000 in Negotiations are ongoing with a number of other countries, so the respect of the first £6,000,000 plus 9% of each £100 or part of £100 number is expected to grow. in excess thereof. As of 29 July 2015, Jersey has signed 37 tax information exchange A land transactions tax applies to share transfer transactions agreements (TIEAs) with Argentina, Australia, Austria, Belgium, involving residential property in Jersey held through a company. Brazil, Canada, Chile, China, the Czech Republic, Denmark, the The purchaser of a Jersey residential property by share transfer has Faroe Islands, Finland, France, Germany, Greenland, Hungary, to pay a tax equal to the amount of stamp duty which would have Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Latvia, been paid on Jersey immovable property. Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, Additionally, there is a stamp duty payable on borrowing monies Romania, Slovenia, South Africa, Sweden, Switzerland, Turkey, the secured on Jersey residential property at a rate of duty of 0.5%. UK, and the United States. Agreements with Brazil, Belgium, Chile and Spain are expected to come into force in 2017. An agreement with Spain is initialled and ready for signing as of 15 November 5 Taxation of Corporate Vehicles 2016. Furthermore, draft agreements have been exchanged with Bulgaria, Kenya, Lithuania and Slovakia.

5.1 What is the test for a corporation to be taxable in your Jersey became a party to the OECD/Council of Europe Multilateral jurisdiction? Convention on Mutual Administrative Assistance in Tax Matters on 1 June 2014. This provides for the exchange of information on A company is treated as resident in Jersey (and therefore prima facie request on the same basis as the bilateral TIEAs with 20 countries, subject to income tax in Jersey) under Article 123 of the Income Tax including Azerbaijan, Belize, Cameroon, Colombia, Costa Rica, (Jersey) Law 1961 if: Croatia, Cyprus, Georgia, Ghana, Greece, Kazakhstan, Lithuania, Moldova, Nigeria, Russia, the Slovak Republic, Spain, Tunisia (a) it is incorporated in Jersey, unless: and Ukraine. It also provides the basis for automatic exchange of (i) its business is centrally managed and controlled outside information under the Common Reporting Standard. Jersey in a country or territory where the highest rate at which any company may be charged tax on any part of its income is 20% or higher; and 6.2 Do the income tax and capital gains tax treaties (ii) the company is resident for tax purposes in that country or generally follow the OECD or another model? territory; or (b) it is incorporated outside Jersey but its business is managed The earlier tax arrangements between the United Kingdom and and controlled in Jersey. Jersey did not follow the OECD model and were more limited, See question 2.2 above for a brief summary of the Jersey tax although the treaty is under revision. TIEAs follow the OECD treatment of companies. model.

5.2 What are the main tax liabilities payable by 6.3 Has your jurisdiction entered into estate and gift tax a corporation which is subject to tax in your treaties and, if so, what is their impact? jurisdiction? This is not applicable. Generally speaking, Jersey companies are liable to income tax at the rate of 0%, but certain companies which are regulated by the Jersey 6.4 Do the estate or gift tax treaties generally follow the Financial Services Commission are taxed at 10% (this is known as OECD or another model? the “Zero/Ten” tax treatment). Jersey utility companies are liable to income tax at the rate of 20%. This is not applicable.

5.3 How are branches of foreign corporations taxed in your jurisdiction? 7 Succession Planning

Income of a business which would be liable to tax if it accrued to 7.1 What are the relevant private international law a Jersey resident company is equally taxable where it accrues to a (conflict of law) rules on succession and wills, non-resident company carrying on the business in Jersey through a including tests of essential validity and formal validity Jersey branch. in your jurisdiction?

With regard to formal validity, wills of immovable estate in Jersey

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must follow strict rules, including a requirement that the will must In the event of an intestacy, the surviving spouse/civil partner shall be read aloud to the testator/testatrix by a Jersey advocate or solicitor be entitled to a usufruit of the matrimonial home (with the usual or member of the States of Jersey and executed in the presence of rights and obligations of a usufruitier). two independent witnesses (one being a specially qualified one). Share transfer Jersey residential property forms part of the Wills of Jersey movable estate have more relaxed execution rules, deceased’s movable estate (as the property inherited is shares) and broadly similar to those of England and Wales. is therefore subject to the forced heirship provisions referred to in With regard to movable property, essential validity is determined by the answer to question 7.1 above. the law of the deceased’s domicile at death. The rules in relation to the succession of movable estate for persons who die domiciled in

Jersey Jersey are broadly as follows. 8 Trusts and Foundations Subject to the rules on spouses living apart at the date of death, where a spouse (including for these purposes a civil partner) dies 8.1 Are trusts recognised in your jurisdiction? intestate, their Jersey movable estate devolves as follows: (a) where the deceased spouse leaves a surviving spouse but Yes. The courts of Jersey have recognised trusts for many years and, no issue, the surviving spouse takes the whole of the net since 1984, such recognition has been on a statutory footing under the movable estate; or Trusts (Jersey) Law, 1984. That statute is a leading and extremely (b) where the deceased spouse leaves a surviving spouse and well-recognised statute in the international offshore trusts world. issue, the surviving spouse is entitled to: (i) the household effects (meaning articles of household or personal use or ornament normally situated in or 8.2 How are trusts taxed in your jurisdiction? around the matrimonial home, but excludes any motor vehicle; any article used wholly or principally for Where either all of the life tenants of a trust or all of the beneficiaries business purposes; money or securities for money; any of a trust without life tenants: single article or any single group of similar or related ■ are non-Jersey-resident individuals; articles forming a set having in either case a value over £10,000; and any article of personal use or ornament ■ are legal bodies and arrangements ultimately wholly owned which is the subject of a specific bequest under the will by non-Jersey-resident individuals; or of the deceased spouse); ■ are Jersey charities exempt from income tax under Article 115 (ii) other movable estate to a value of £30,000; and of the Income Tax (Jersey) Law 1961 (subject to amendment following the coming into force of Article 41 of the Charities (iii) one-half of the rest of the net movable estate, (Jersey) Law 2014), and the issue take the other half of the rest of the net movable by concession the trustees will not be taxed on any non-Jersey- estate. source income and the statutory exemptions outlined in Article Where a person dies testate as to movable estate and is survived by: 118B of the Income Tax (Jersey) Law 1961 will be treated as being (a) a spouse but no issue, the surviving spouse is entitled to available to the trustees. claim as “légitime”: In this context, “life tenants” means beneficiaries of a trust having a (i) the household effects; and right to trust income as it arises. (ii) two-thirds of the rest of the net movable estate; or If trustees are in receipt of income from another trust with Jersey (b) a spouse and issue: resident trustees or from the activities of a partnership established (i) the surviving spouse is entitled to claim as légitime the or incorporated in Jersey, such income will retain the character household effects and one-third of the rest of the net in which it arose to the underlying trust or partnership. This also movable estate; and applies where there is more than one tier of other trusts and/or (ii) the issue are entitled to claim as légitime one-third of the partnerships. rest of the net movable estate; or The statutory exemptions in Article 118B include an exemption (c) issue but no spouse, the issue is entitled to claim as légitime from Jersey income tax for: two-thirds of the net movable estate. 1. Jersey bank interest; For the purposes of the above rules, monies received under a 2. any distribution received from a Jersey resident company policy of insurance taken out by the deceased spouse on the which is made out of profit/gains taxed at the rate of 0% in deceased spouse’s life, for the sole purpose of repaying or reducing the company; and indebtedness, which is secured either by a simple conventional 3. interest paid by a Jersey resident company. hypothec or a judicial hypothec (in effect, a mortgage) against immovable property owned by the deceased alone or with another Where a Jersey resident individual is entitled to income from any or others, is deemed not to form part of the net movable estate to part of the trust as it arises, is a beneficiary of a trust without life the extent that they are used to repay or reduce such indebtedness or tenants, or the ultimate beneficial owner of an interest in a legal body interest accruing thereon to the date of repayment. or arrangement which is a beneficiary, the concessional exemption granted above will be restricted. The restriction will operate so as to charge tax on the total income of the trust less any non-Jersey- 7.2 Are there particular rules that apply to real estate held source income or any income falling within the statutory exemptions in your jurisdiction or elsewhere? in Article 118B paid to, or expressly designated or accumulated for the exclusive benefit of, a non-resident individual beneficiary or a Jersey law confers complete testamentary freedom upon the testator beneficiary which is a legal body or arrangement wholly owned by of a will of Jersey immovable property, subject only to a right of non-resident individuals. dower for a surviving spouse or civil partner which, if claimed, entitles him or her to a life enjoyment (a ‘usufruit’) of one third of the deceased’s immovable estate at the date of the deceased’s death.

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On the rare occasions where the settlor is a Jersey-domiciled person, 8.3 How are trusts affected by succession and forced the customary law of Jersey relating to légitime may be enforced by heirship rules in your jurisdiction? the surviving spouse or surviving issue of such a deceased Jersey- domiciled settlor. The assets in a trust (other than a bare nomineeship) do not form part of a person’s estate and therefore, as a general rule, are not affected by succession rules in Jersey. An exception to this is the common 8.4 Are foundations recognised in your jurisdiction? law rule of rapport à la masse applicable to the estate of a Jersey domiciled settlor. Yes. It has been possible to create a Jersey foundation under the As for forced heirship, the outcome depends on whether the settlor Foundations (Jersey) Law 2009 (the “Foundations Law”) since 17 Jersey is Jersey-domiciled or not. Article 9 of the Trusts (Jersey) Law July 2009. 1984 disapplies all foreign forced heirship rules for all non-Jersey- domiciled settlors (these are sometimes referred to as “firewall” 8.5 How are foundations taxed in your jurisdiction? provisions), so that any question concerning: (a) the validity or interpretation of a Jersey trust; Foundations are taxed in Jersey on a similar basis to that of a (b) the validity or effect of any transfer or other disposition of company, as set out in the response to question 2.2. property to a Jersey trust; Income distributions from foundations will be taxed according to (c) the capacity of a settlor; the residency and status of the recipient. (d) the administration of the Jersey trust, whether the administration be conducted in Jersey or elsewhere, including questions as to the powers, obligations, liabilities and rights 8.6 How are foundations affected by succession and of trustees and their appointment or removal; forced heirship rules in your jurisdiction? (e) the existence and extent of powers, conferred or retained, including powers of variation or revocation of the trust and Foundations are treated in a similar way as trusts (the “firewall” powers of appointment and the validity of any exercise of provision in respect of forced heirship is in Article 32 of the such powers; Foundations Law). (f) the exercise or purported exercise by a foreign court of any statutory or non-statutory power to vary the terms of a Jersey trust; or 9 Matrimonial Issues (g) the nature and extent of any beneficial rights or interests in the property, 9.1 Are civil partnerships/same-sex marriages permitted/ is determined in accordance with the law of Jersey and no rule of recognised in your jurisdiction? foreign law may affect such a question. Without prejudice to the generality of the above, any question Civil partnerships are permitted and recognised in Jersey. Broadly mentioned in (a) to (g) inclusive is determined without consideration speaking, the Civil Partnership (Jersey) Law 2012 affords civil of whether or not: partners the same rights (including all civil, fiscal and succession (a) any foreign law prohibits or does not recognise the concept of rights) as a married couple. However, those wishing for their a trust; or overseas civil partnership to be recognised in Jersey will need (b) the trust or disposition avoids or defeats rights, claims, or to satisfy certain conditions set out in Schedule 1 of the Civil interests conferred by any foreign law upon any person by Partnership (Jersey) Law 2012. reason of a personal relationship or by way of heirship rights, Currently, same-sex couples cannot get married in Jersey but there or contravenes any rule of foreign law or any foreign judicial have been calls for same-sex marriage to become available in Jersey. or administrative order or action intended to recognise, protect, enforce or give effect to any such rights, claims or interests. 9.2 What matrimonial property regimes are permitted/ The above, however: recognised in your jurisdiction? (a) does not validate any disposition of property which is neither owned by the settlor nor the subject of a power of disposition Jersey has a separation of property regime (save for the application vested in the settlor; of dower rights as referred to above). Jersey does not apply a (b) does not affect the recognition of the law of any other community property regime as between spouses. jurisdiction in determining whether the settlor is the owner of any property or the holder of any such power; 9.3 Are pre-/post-marital agreements/marriage contracts (c) is subject to any express provision to the contrary in the terms permitted/recognised in your jurisdiction? of the trust or disposition; (d) does not, in determining the capacity of a corporation, affect In Jersey, the position for agreements is very similar to that in the recognition of the law of its place of incorporation; England and Wales, and Guernsey. Pre-nuptial agreements do not (e) does not affect the recognition of the law of any other bind the court, but their existence can be taken into account in the jurisdiction prescribing the formalities for the disposition of exercise of the court’s discretion. property; (f) does not validate any trust or disposition of immovable property situated in a jurisdiction other than Jersey which is 9.4 What are the main principles which will apply in invalid under the law of that jurisdiction; and your jurisdiction in relation to financial provision on divorce? (g) does not validate any testamentary disposition which is invalid under the law of the testator’s domicile at the time of his death. In relation to ancillary relief, the overriding objective is to deal

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with cases justly (rule 47, Matrimonial Causes Rules 2005). The ■ a Commonwealth citizen admitted on the grounds of UK Matrimonial Causes (Jersey) Law 1949 stipulates that the court must ancestry; exercise its powers to make financial orders, “having regard to all ■ a Commonwealth citizen with a certificate of entitlement to the circumstances of the case including the conduct of the parties to the right of abode; the marriage insofar as it would be inequitable to disregard it and to ■ a participant in the Youth Mobility Scheme; their actual and potential financial circumstances”. Where required, ■ a minister of religion; there is a starting point of an equal division of assets. However, the court retains a wide discretion. Generally, assets are divided equally ■ a business visitor; or unless the needs of the parties dictate that one party should have a ■ a non-EU/EEA passport holder who has no restrictions greater share in all the circumstances, particularly with regard to the attached to your stay. Jersey care of young children. A person must hold a registration card showing proof of their employment and residential status before commencing new employment or purchasing or leasing new residential property. 10 Immigration Issues

10.2 Does your jurisdiction have any investor and/or other 10.1 What restrictions or qualifications does your special categories for entry? jurisdiction impose for entry into the country? The Immigration Rules make provision for consents for investors Along with the United Kingdom, the Republic of Ireland, the Isle and other certain categories of visitors to the Island. Further, Entitled of Man and Guernsey, Jersey is part of the Common Travel Area, status may be granted on social or economic grounds. In particular, meaning that once a person has been lawfully admitted to one of a person may be granted Entitled status on the grounds of being those territories he can freely travel between any of them. With a high value resident, depending on the annual tax contribution to regard to immigration, elements of the UK Immigration Act 1971 be made by the applicant (see question 3.2 above). Such person extend to Jersey through the Immigration (Jersey) Order 1993. will still be required to satisfy immigration requirements for entry. Generally, nationals of EU and EEA Member States, together with Someone granted Entitled status can buy or lease property in Swiss nationals and certain other Commonwealth citizens, enjoy Jersey as their main place of residence. The Population Office will work and settlement rights in Jersey. Other persons require leave normally require such a person to buy or lease a high value property. to enter the Bailiwick of Jersey. Such persons can enter as visitors, business visitors, students and for other reasons provided that certain requirements are satisfied in accordance with the Immigration Rules 10.3 What are the requirements in your jurisdiction in order issued by the Island’s Lieutenant-Governor (the “Immigration to qualify for nationality? Rules”). Migration to Jersey cannot be fully understood without taking into As Jersey is not a sovereign state, it does not have its own “nationals”. account the working of the Control of Housing and Work (Jersey) Accordingly, the indigenous Jersey population are British Nationals. Law 2012 (the “Housing and Work Law”). The Housing and The British nationality exam is conducted locally with some local Work Law creates in summary four categories of residential and questions. employment status: ■ Entitled – someone who has lived in Jersey for 10 years 10.4 Are there any taxation implications in obtaining (subject to certain rules); nationality in your jurisdiction? ■ Licensed – someone who is an ‘essential employee’; ■ Entitled for Work – someone who has lived in Jersey for five Jersey’s system of taxation does not have regard to nationality. consecutive years or is married to someone who is ‘Entitled’, ‘Licensed’ or ‘Entitled for Work’; and 10.5 Are there any special tax/immigration/citizenship ■ Registered – someone who does not qualify under the other programmes designed to attract foreigners to become categories. resident in your jurisdiction? The residential housing market in Jersey is divided between qualified and registered accommodation. Qualified accommodation can only Yes. See the answer to question 10.2 above relating to high-value be owned and/or occupied by persons with Entitled or Licensed residents. status. Those with Entitled for Work or Registered status must occupy registered accommodation (subject to certain exceptions). Businesses also require specific approval to engage persons with 11 Reporting Requirements/Privacy Licensed or Registered status.

Businesses may also need to apply to the Immigration Office for a 11.1 What automatic exchange of information agreements work permit. A work permit will not be needed if you are: has your jurisdiction entered into with other ■ a British citizen or a British subject with the right of abode; countries? ■ a national of a Member State of the European Union (EU)/ European Economic Area (EEA) (except if you are a Croatian On 13 December 2013, Jersey entered into an intergovernmental national); agreement with the US in relation to FATCA. Jersey financial ■ a non-EEA family member of an EEA national may also institutions are required to report on an annual basis the identity of, work without a permit but must obtain an EEA family permit and certain other information about, direct and indirect US investors before entering Jersey; in Jersey entities to the Jersey tax authority for onward transmission ■ a Swiss national; to the US Internal Revenue Service. ■ a Commonwealth citizen admitted as a working holiday- On 22 October 2013, Jersey and the UK signed an intergovernmental maker; agreement concerning the automatic exchange of tax information.

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The intergovernmental agreement is part of a package of measures the Fourth AML Directive. However, should Jersey wish to follow intended to enhance existing arrangements in relation to the the EU approach to safeguard market access, what has been agreed exchange of tax information in respect of UK residents. does not include an obligation to have a public register of beneficial In November 2013, Jersey joined with 35 other countries in a public ownership of companies. There is a central register requirement statement committing to early adoption of the OECD’s Common which Jersey already meets through the records kept at the Jersey Reporting Standard on automatic exchange of information. By Financial Services Commission. Information on the central register the end of 2015, domestic legislation was in place in Jersey to can be accessed by law enforcement and tax authorities on request implement the Common Reporting Standard, and the first exchanges if that request is made in accordance with the provisions of the of tax information occurred in 2017. relevant statutes.

What has been agreed under the Directive in respect of trusts Jersey is that Member States shall require that trustees of any express 11.2 What reporting requirements are imposed by domestic law in your jurisdiction in respect of trust governed under their law obtain and hold adequate, accurate structures outside your jurisdiction with which a information on beneficial ownership regarding the trust. This person in your jurisdiction is involved? information shall include the identity of the settlor, the trustees, the protector (if any), the beneficiaries or class of beneficiaries and A Jersey resident is required to disclose, in the annual Jersey income any other natural person exercising effective control over the trust, tax return, details of holdings in companies (excluding those traded such information to be accessed in a timely manner by competent on a recognised stock exchange) and interests under trusts and authorities and financial intelligence units alone. That is currently foundations. the Jersey position in that law enforcement and tax authorities can obtain from Jersey-based trustees information on the beneficial In addition, under FATCA and the Common Reporting Standard (see ownership of trusts if a request is made in accordance with the question 11.1), which are reciprocal arrangements, information in provisions of the relevant statutes. There is no requirement under the respect of accounts held by Jersey residents at non-Jersey financial Directive for a central register except in respect of trusts governed institutions in participating jurisdictions may be automatically by a jurisdiction’s law that generate tax consequences and it is reported to the Jersey Comptroller of Taxes. reasonable to assume that the latter is limited to tax consequences domestic to the jurisdiction. 11.3 Are there any public registers of owners/beneficial owners/trustees/board members of, or of other persons with significant control or influence over companies, foundations or trusts established or resident in your jurisdiction?

The EU Fourth Anti-Money Laundering Directive (adopted by the EU in 2015) contemplates the establishment of central registers of beneficial ownership of companies. Under the relationship the Island has with the EU there is no obligation on Jersey to adopt

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Edward Devenport Giles Corbin Mourant Ozannes Mourant Ozannes 22 Grenville Street 22 Grenville Street St Helier St Helier JE4 8PX JE4 8PX Jersey Jersey

Tel: +44 1534 676 366 Tel: +44 1534 676 521 Email: [email protected] Email: [email protected] URL: www.mourantozannes.com URL: www.mourantozannes.com Jersey

Edward is a partner in our Jersey office. The main focus of his practice Giles is a Jersey advocate and partner in the International Trusts & is trusts holding private wealth, but he also has substantial experience Private Client team in Jersey. He has worked in Jersey law since 1995 working with trust structures in the commercial sphere such as and qualified as an advocate in 2000. Giles practises in all aspects of pensions, employee benefit trusts, unit trusts and investment funds. non-contentious trust and foundation law (whether private, purpose, philanthropic or hybrid in nature) with a focus on positively assisting Edward worked in investment banking in London for three years before trust companies on issues concerning private trusts, foundations and, joining the firm in 1990. He became a partner in 1996. From 2008 to in particular, indemnities, supplemental instruments, reserved powers, 2012 he served on the firm’s management committee. charters and regulations for Jersey Foundations, and the preparation Edward is a regular speaker at conferences both inside and outside of all other trust and foundation-related documentation. Jersey and is responsible for the Jersey chapters in a number of Giles listed in the 2009 Top 50 Private Client Advisors for the UK, jurisdictional guides to trusts. Over the years, he has served on Crown Dependencies and British Overseas Territories. various industry working parties considering the improvements to Jersey’s trust and fund legislation.

Mourant Ozannes is a leading international law firm advising many of the world’s foremost financial institutions, public companies, global corporations and fund promoters, as well as high-net-worth private clients on the laws of the British Virgin Islands, the Cayman Islands, Guernsey and Jersey. The firm has offices in these key offshore jurisdictions, as well as in London and Hong Kong. Through its affiliated business, Mourant Ozannes Corporate Services, it also provides a comprehensive range of corporate administration services through a dedicated team of experienced professionals. The firm delivers partner-led advice on complex, multi-jurisdictional and often high-profile transactions and disputes for clients looking for depth of expertise and a range of resources across Asia, Europe, Latin America, the Middle East and North America. Mourant Ozannes has 59 partners and over 200 lawyers worldwide and boasts the largest litigation practice offshore. It has an enviable client base, advising 80% of the world’s top 50 banks and more FTSE 100 and FTSE 250 companies than any other offshore law firm. In its core practice areas, the firm also holds more top-tier rankings across its locations than any other firm. Recent awards won by Mourant Ozannes include: ■■ Offshore Firm of the Year 2017, Chambers Europe. ■■ Best Offshore Law Firm – Client Service: HFMWeek US Hedge Fund Services Awards 2016. ■■ Best Offshore Law Firm – Client Service: HFMWeek European Hedge Fund Services Awards 2015 & 2016. ■■ Firm of the Year, Jersey: Who’s Who Legal. ■■ Best Offshore Law Firm: Hedgeweek Global Awards 2015.

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