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Newsletter | Articles MANAGED TRUST COMPANIES A common theme running through this newsletter for some time has been the development of increasingly sophisticated new solutions that meet the challenges of the modern business environment. Although new ideas and structures are at the forefront of these developments it is true to say that many of the structures we use are in fact older ideas that have demonstrated their usefulness over the years. One of the most robust and flexible tools available to us is of course the Trust. Although the uses of trusts solely for tax planning is well known, equally important is the asset protective quality of the trust, combined with the long-term estate planning opportunities the trust presents to our clients. Many leading practitioners are coming to believe that the location of the trust is the single most important factor in its effectiveness for all three of these aims. Different jurisdictions have tried to stay at the forefront of trust law development and relatively recent innovations such as the "Asset Protection Trust" have caught the attention of professional practitioners. The effectiveness or otherwise of these statute based trusts could be the subject of another entire article but what is the solution for the practitioner who recognises the usefulness of trusts but is not himself based in a jurisdiction that fully supports the trust concept? Take for example a Swiss based Fiduciary company who wishes to promote and utilise trusts for his clients. What are his choices? He can pass the business through to a practitioner in his chosen jurisdiction of course but why would his client want to deal with some other professional person when he already has established a relationship with his chosen professional adviser? He can of course open a new office in a top class trust jurisdiction and establish a trust company. For our Swiss Fiduciary however, the time may not be right for such a move. Perhaps he does not have the management or financial resources needed, or perhaps the trust business has not yet grown to a size that warrants such an investment. The Isle of Man Managed Trust Company The simple answer to this problem is the Isle of Man Managed Trust Company. ILS will establish an Isle of Man company, beneficially owned by the Swiss Fiduciary and it is this company that will provide trust services to the clients. ILS will provide all necessary officers to the company and ensure that it complies with local regulations. In addition, a new licensing regime will shortly be introduced in the Isle of Man for professional trust companies and, whilst such licensing is an important and essential development, there will inevitably be additional complications as is always the case with new regulation. When it becomes necessary, ILS will take the Managed Trust Company through the licensing process and will provide ongoing support and management services to the company to ensure it complies with its licensing requirements. Joint trustee arrangements and the management of underlying companies can be tailored to ensure the relationship between the Swiss Fiduciary and his client remains entirely undisturbed. There is no single business model for this solution; each structure has to be accurately tailored to individual circumstances and we will be happy to have an informal and confidential discussion about your exact requirements. The Isle of Man Trust Finally, a few words on the choice of the Isle of Man as the location for the Managed trust company. A traditional Anglo Saxon jurisdiction, the Island has a parliamentary and judicial system dating back to the very origins of trust law. The Law Courts of the Isle of Man have demonstrated time and time again their willingness to uphold trust principles against determined attack and the robustness of the properly settled Isle of Man trust is beyond question. Historical perspective however has not prevented the Isle of Man authorities from keeping up to date with the latest trust law developments and when necessary incorporating innovations into Isle of Man trust law, such as the 1996 Purpose Trust Act. The third factor influencing our choice of jurisdiction is the sophistication and reputation of the financial infrastructure of the Island coupled with the highest possible standards of regulation and consumer protection. Our Swiss Fiduciary can be confident that not only has he placed his clients affairs in a trust jurisdiction of the highest possible standing; he has also maintained and enhanced his direct personal relationship with his client. At the same time, the Isle of Man Managed Trust company will in time become an important and separate profit centre in an attractively low tax jurisdiction. Now, what more could a professional adviser ask for? For more information on Isle of Man Trusts and Managed Trust Companies please contact David Ashton.