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Modernisation of the British Virgin Islands Trust legislation

July 2021 Robert Lindley

Legislative amendments to the British Virgin Islands (“BVI”) trust legislation took effect on 9 July 2021 under the Trustee (Amendment) Act, 2021. The reforms introduce welcome improvements to the BVI’s Trustee Act and ensure that the BVI remains a leading offshore jurisdiction for the establishment, administration, and maintenance of trusts.

The legislative amendments to the Trustee Act, 1961 (the “Trustee Act”), which is the main source of legislation concerning BVI trusts, are part of a process of fine-tuning the legislation by way of reforms brought under the Trustee (Amendment) Act, 2021 (the “Amendment Act”) which has introduced the following key changes:

  1. Power of the BVI Court to vary trusts: making it easier for the BVI Court to approve a variation to a trust without the consent of adult beneficiaries and where such variation is “expedient”.
  2. Codifying the “Hastings-Bass” principle: providing a clear statutory framework to apply for relief where the Trustee (or other power holder) or any other person beneficially interested in the trust, including the object to the power, has made a mistake in the exercise of their powers.
  3. Extending the “firewall” provisions: extending the “firewall” or foreign element provisions which protect against a foreign law applying to a BVI trust so that all questions arising are to be determined exclusively by reference to BVI law and expanding the category of “personal relationships” forming the basis of claims against the BVI trust.
  4. Strengthening reserved powers provisions: introducing a comprehensive set of powers reserved to settlors and “any other person or to any office holder or body, including (but not limited to) a protector”.
  5. Duty to maintain and keep trust records: amendment of the record keeping obligations imposed on trustees of BVI trusts.

 

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Modernisation of the British Virgin Islands Trust legislation

 


Robert Lindley
Partner, Head of Cayman & BVI Private Client & Trust

British Virgin Islands, Cayman Islands   +1 345 814 7360


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