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For those who attended the Isle of Man STEP Annual Conference on October 14, 2022, you will have heard from Isle of Man Senior Partner Erin Trimble-Cregeen, as well as partner Jared Dann from Appleby Jersey, speak out on whether the Isle of Man’s trust industry remains competitive in the current climate.

In doing so, Erin highlighted the main amendments proposed by the Trust and Trustees Bill 2022 (the Invoice) from the perspective of a trust lawyer before Jared compared the arrangements to those existing in Jersey and Guernsey, and opened a general discussion on whether or not the proposals made the Isle of Man more competitive .

During the week the bill is going through second reading (October 25, 2022), it might be useful to recap what were considered to be the main talking points of the bill, namely (and in very brief summary) :

  • Amendment to the Trustees Act 2001:
    • Inserting a new part 1A: Duty to Disclose Trust Information;
      • This proposed section is intended to codify the position set out in Manx de Schmidt v. Rosewood and clarifies who may request information about the trust, and when (and under what circumstances) a trustee may refuse to provide information about the trustee;

    • Insertion of a new part 3A: Power of the trustee to contract with himself;
      • This section, if enacted, facilitates contracting between trustees when acting as trustees of multiple trusts and effectively seeks to bring the law into line with the realities of the modern trust industry in this regard;

    • Insertion of a new part 4A: Liability of Trustees to Third Parties;
      • Where a trustee enters into a transaction with a third party as trustee and has notified that third party in writing that he is acting as trustee, then the trustee’s liability is limited to the value of the trust property.

  • Amendment to the Trustee Act 1961: Insertion of a new section 55A: Power to declare the exercise of a power voidable;
    • This aims to enshrine what was previously called “the rule in Hastings-Lower‘ in the Act thus bringing clarity to the Isle of Man trusts industry which has been lacking since the Supreme Court’s 2013 ruling in Pitt vs. Holt.

    • It is intended to provide that the court may declare a transfer or disposition void or voidable where the trustee, in the exercise of its power, has failed to take into account relevant (and only relevant) factors and, but for this breach, the Trustee would not have exercised the power as they did.

    • Basically, this power is available whether or not the failure to consider relevant (and only relevant) factors resulted from a lack of care or other fault on the part of the trustee or an adviser to the trustee; indeed, no dereliction of duty is necessary.

Whilst the above is only a very brief overview of the proposed provisions and does not seek to go into the details of how the sections will operate, we consider that if the Bill is passed it should enable the Isle of Man to remain competitive with regards to its trusted legislation.

Here is a link to the bill: Trusts and Trustees Bill 2022.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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