When trusts in international financial centres are established, settlors will inevitably require a certain level of comfort by ensuring that certain critical powers are reserved by themselves or are granted to others such as protectors. The British Virgin Islands was the first jurisdiction to introduce legislative provisions expressly permitting this and these legislative provisions were contained in section 86 of the Trustee Act which came into force on 1 November 1993. Since then, numerous competitor jurisdictions had introduced legislation in relation to reserved powers and inevitably, given the passage of time, such legislation tended to be somewhat more comprehensive and rather clearer than that which was contained in section 86. The new version of section 86 of the Trustee Act was prepared after analysing the laws of the British Virgin Islands' competitors and reflects the best features of their legislation, omitting those of their ingredients which are regarded as potentially problematic.
Read the full article published in Trusts & Trustees (Oxford University Press) here.
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