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Trusts

Where the trust is resident in Guernsey for tax purposes (the administration of the trust is carried out in Guernsey and the majority of the trustees are resident in Guernsey), the Director of Income Tax will only assess the trustees to Guernsey tax on income arising in Guernsey where there are no beneficiaries resident in the island and with the usual further exception of local bank interest.

Guernsey trustees are naturally liable to the normal withholding taxes, deducted from payments made to them by companies throughout the world, and the trustees themselves cannot usually make a claim for repayment of such withholding taxes. However in certain circumstances, where income is appointed (distributed), the recipients (beneficiaries) may make claims under double taxation agreements existing between their own territory and the country from which the income arose.

Where Guernsey trustees hold British Government Securities, they may, in certain circumstances, claim exemption or recover the United Kingdom tax deducted at source from the interest arising. The trustees are able to invest worldwide and may make payments to beneficiaries wherever they are resident, without restrictions, on behalf of a trust.