British Virgin Islands Special Trust Act, 2003 (VISTA)
The Governor of the British Virgin Islands has signed a proclamation which will bring the following Acts into effect on 1 March 2004: the Virgin Islands Special Trusts Act, 2003 and the Trustee (Amendment) Act, 2003.
The new legislation will make the BVI trust a much more user-friendly vehicle and greatly enhance the attractiveness of the BVI as a trust jurisdiction.
VIRGIN ISLANDS SPECIAL TRUST ACT, 2003 (VISTA)
The Virgin Islands Special Trust Act will enable shareholders to set up trusts of shares in BVI companies that disengage the trustees from management responsibility of the company, permitting the shares to be retained as long as the directors see fit. These trusts will be called VISTA trusts.
There is a complete removal of the monitoring and intervention obligations of trustees. Trustees will not be liable for retaining shares (for example, where there may be a drop in the market and the shares lose value). The trust instruments will be able to set out rules regarding the appointment and removal of directors of the company. Share sales can be prohibited without the directors' consent and there is the possibility of enforcement by interested persons, such as beneficiaries and directors.
This Act circumvents the difficulties that arise when the trustees are squeezed between exposure to potential liability for not putting the trust's interests ahead of the company and pressure from the settlor to retain shares. To a settlor and his or her family, the self managed company represents much more than just impersonal investments and the VISTA trust will be ideal where a settlor intends the company's shares to be retained and its affairs to be managed by its directors without trustee interference.
This Act does not apply to all trusts. It is confined to trusts that hold shares in BVI IBC’s and local Companies Act companies and as a regulatory safeguard provides that a BVI licensed trust company shall act as trustee.
TRUSTEE (AMENDMENT) ACT, 2003
This legislation makes amendments to the existing Trustee Act. The STEP committee that assisted with drafting the legislation is of the opinion that the new rules are drawn up so that they are likely to command a substantial degree of international recognition. Only Jersey and Anguilla have similar laws and this should make the BVI a very attractive trust jurisdiction.
Some areas that have been amended include the dealings between trustees and third parties (the amendments will make BVI trusts much more attractive vehicles for commercial transactions); conflict of laws (the amended Act is not be too inward looking which will make it more likely to be upheld in other jurisdictions and there are robust anti-forced heirship provisions); the sections dealing with charities and purpose trusts have been overhauled and variation of powers. The trust duty stamp has been increased to $100 and there is an exemption from duty for charitable trusts.
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