Well, I never thought the day would come that Jeremy Clarkson would inspire anyone to write about trusts. I also never thought I would see the day that a Labour Government would feel the need to encourage the average farmer to seek tax planning advice but yet the recent furore over the reforms to agricultural property relief in the U.K. has managed to do just that. 

So, to paraphrase Mr Clarkson, why should (or would) anyone want to set up a trust? There are many reasons to look into setting up a trust and thankfully many types of trusts. Not everyone who wants to settle a trust does so for tax planning purposes. 

My preferred way to explain the trust concept is by looking back to the Crusades and the Crusader(/settlor)’s intention to protect family assets (trust fund) by transferring ownership to a trusted friend or family member (trustee) to hold for the benefit of his family (beneficiaries) in his absence in the expectation of the assets being transferred back to him (assuming he returned, those being uncertain times…). Sometimes it worked well and other times, the trust element of the arrangement was breached due to fraud or misfortune. The key was often in finding the right person to act as trustee but even that carried  risks - if the trustee should die before the Crusader, the family might be hard pressed to have their case heard especially if they were “only” women or children arguing their rights against adult male heirs of the trustee who held the legal interests in the trust assets.

The better part of a millennia on, there have been many developments in trust law in the U.K. and Gibraltar such as the crucial recognition under English law of the need to differentiate between legal ownership and equitable ownership. A notable development is the possibility of having professional corporate trustees overseen by a regulatory body, the officers of which are trained to ensure they can fulfil their fiduciary duties, always with a view to the best interests of the beneficiaries.
 
In their various forms, we find that the intentions of today’s settlors when settling a trust most often mirror those of the devout Crusader - a wish to protect and preserve family assets for current and future generations but with the added legal protection of the precedent of hundreds of years of the common law trust as well as the flexibility of tailoring the specifics of the trust according to the settlor’s wishes, with varying levels of discretion available to the trustees and the possibility of involving a protector if preferred. 
 

If you would like to explore the benefits of setting up a Gibraltar trust, Line Group offers a full range of trustee services and have lawyers and experienced TEPs on hand to discuss your needs.