A Private Trust Company (PTC) is, essentially, a company which possesses Trustee powers and which does not conduct Trust business with the general public, its sole purpose being to act as a Trustee of a Family Trust or a group/series of related Trusts.
As long as certain criteria are fulfilled the PTC will not have to obtain a licence to carry out Trust Company business.
A PTC can be particularly useful for wealthy families who either do not wish to relinquish control to professional Trustees or where the Trust fund is to be invested in assets, which a professional trustee may be reluctant to deal with, such as works of art or family businesses.
- The board of the PTC may consist of family members or trusted advisors. The residence of the PTC’s directors may have an impact on the underlying Trust’s tax status so professional advice is recommended. Generally, a company is classed as being resident for tax purposes in the jurisdiction where mind, management and control are exercised. Care needs to be taken to ensure that the Directors of the PTC are not deemed to be resident in a high tax jurisdiction;
- Representatives of the Trust Company business are appointed to the board to ensure appropriate governance;
- The PTC may be owned in a variety of ways such as by a Purpose Trust or a Foundation for confidentiality purposes;
- The professional service provider acts as an administrator of the structure and assists the board of the PTC with corporate governance and Trustee considerations.
Control – By retaining the power to appoint the directors of the PTC the Settlor, whether or not a director themselves, will experience a high degree of control over how the Trust is run. The Settlor and his/her family have an opportunity to be involved in the management, investment and disposition of the trust assets.
In Depth Knowledge – Allows family members and their advisors to bring their varied knowledge onto the Board. Particularly useful if the underlying assets are complex, high risk or part of the family business.
Succession Planning – By engaging younger family members in the management of family assets, and involving them in the decision-making process, a training program is instituted preparing the younger generation to effectively and responsibly manage wealth.
Diversity of Asset Base – Professional Trustees may be reluctant to hold certain assets therefore a PTC allows greater choice as to what investments may be made with the Trust fund.
Continuity – The administrator may change but the PTC will remain as the Trustee providing continuity of asset ownership.
OCI can assist you to incorporate a Private Trust Company in Nevis, Seychelles, BVI and the Cook Islands.
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DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.