Private Trust Companies (“PTCs”) are a useful tool used by many high net worth individuals and their family offices. Coverdale and other PTCs act as trustees for trusts established for an affiliated group. The directors and officers of the PTCs are usually family members and family advisors. They are often used to establish trusts that hold assets that the family prefers to have administered by persons with whom they are familiar. PTCs are particularly popular with clients from civil law jurisdictions who are not comfortable giving control over family assets to a professional trustee.
They are also used to hold assets that professional trustees are often not able or not willing to administer such as operating companies, real estate, yachts, art work and jets.
There is no need to have the PTC licensed as a trustee, provided that certain conditions are met.
A PTC must:
A company must meet the following conditions to be considered a PTC:
- be a BVI company limited by shares or guarantee;
- must state in its memorandum of association that it is a PTC
- must have PTC in the company name
The following are the business activity requirements that a PTC must satisfy:
- It cannot carry on any business other than that of being the Trustee, Protector or administrator of trusts.
- It cannot solicit trust business from members of the public.
- It can only engage in “unremunerated trust business” or “related trust business”.
The term “Unremunerated trust business” means that no compensation may be payable to, or received by, the PTC, or any person associated with it, in consideration for, or with respect to, the trust services provided by the PTC.
A PTC will be treated as carrying on “related trust business” if it acts as trustee of (i) a single trust, all the beneficiaries of which are charities or have certain specified blood, marital or adopted relationships to the settlor (i.e. the person establishing the trust), or (ii) more than one trust, each of the settlors of which have those relationships to each other and all the beneficiaries of which have those relationships to the settlors of the trusts (or are charities).
For more information on the use of Private Trust Companies, please contact us and we will get back to you as soon as possible.
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