Mar 2024
Welcome to the 9th edition of the Conyers Private Client and Trust Bulletin with updates from Bermuda, the BVI, the Cayman Islands and Hong Kong.
Partner Robert Lindley from the Cayman Islands and Anna Lin, our Hong Kong litigation Partner, update us on Cayman trustees’ rights to sell trust assets in order to settle their fees. A case from BVI provides guidance on the fascinating question of recognition of an oral will valid under a foreign law. Hong Kong Partner Peter Ch’ng updates us on the Singapore proceedings of the multi-jurisdictional dispute Ivanishvilli v. Credit Suisse which considered questions relating to powers reserved by settlors and trustees’ duties to oversee investments. Senior Associate Davina Hargun from Bermuda gives an update on establishing charitable and philanthropic entities in Bermuda. As you will see, our practice and projects remain as diverse and challenging as ever.
In other news, two seismic events in the world of taxation. First, in his February budget the UK Chancellor announced wholesale reform of the rules relating to the taxation of UK based non-domiciliaries. These changes are still being discussed by our UK counterparts and how they will impact our clients and their trusts structures. Secondly, on 27 December, in line with the initiative of the OECD on global tax reform, Bermuda introduced a tax on corporate profits. Again, this new landscape is in the process of implementation and is anticipated to become effective from 1 January 2025. Presently, the legislation will only apply to corporate entities and groups with annual profits exceeding €750m in two of the previous four years, so will only apply to high value structures. We will be providing more commentary on these two developments in future editions.
Lastly, at the end of February we bid farewell to our Betsy Hitchcock, a key leader of our Bermuda support team. Betsy had been at Conyers for 43 years, and had assisted many Private Client & Trust team members up and through the ranks, many of whom she had seen come and go. She had known at least one partner since he was a boy who would visit his father at the firm! Her departure was a both sentimental occasion, and also one for reflection on the value of teamwork and long term relationships with our colleagues and clients.
Happy Spring.
Bermuda Philanthropic Structures Continue to Grow in Popularity
With its well-respected regulatory regime and highly regarded professional services industry, Bermuda continues to be an ideal location for the creation of an international philanthropic or charitable structure. Companies and high net worth (HNW) families and individuals will find a range of tax efficient, flexible vehicles available for the establishment of charitable or philanthropic entities.
Directors in the Firing Line
While those running companies may be aware of the numerous management and accounting breaches that can give rise to civil liability, there is generally less recognition of the possibility that breaches can also give rise to criminal liability leading to fines, imprisonment or both. In recent years there has been a sea-change in the legislature’s approach to directors’ criminal liability. Although terms of imprisonment remain broadly consistent, fines have increased to a very significant degree. Directors are now in the firing line.
In the Matter of The X Trust and The Y Trust – FSD 57 of 2022 (IKJ)
Trust and estate disputes in both the Cayman Islands and the BVI, and claims against the actions of a trustee / executor or disputes related to an interested party’s entitlement under a deceased’s estate, continue to be on the rise. This article analyses a recent case concerning trust and estate disputes in the Cayman Islands which demonstrates the scope of the courts’ supervisory role and powers.
In the Matter of the Estate of Sheikh Saoud Mohamed Al Thani – BVIHCVAP 2021 / 0001
As the scope and complexity of trust and family estate disputes increases, more scrutiny is required by the courts to consider the arguments put forward in light of the particular circumstances. While the courts have wide-ranging powers, the cases in this series show that it does not necessarily follow that the courts will automatically exercise its powers and discretion to grant relief.
Trustee’s Duty and Anti-Bartlett Clauses – The Ivanishvilli Redux
Just when trustees are feeling safe to go back into the water after the Hong Kong Court of Final Appeal spoke in Zhang Hong Li v. DBS Bank (Hong Kong) Ltd [2019] along comes Ivanishvilli v. Credit Suisse Trust Ltd [2023] where the Singapore Commercial Court held that Credit Suisse Trust as trustee of a Singapore law governed trust, was in breach of its duty to its client to safeguard the trust assets and to account to a record-breaking tune of US$926 million, reliving the thorny issues of a trustee’s duty in a “reserved power” trust and validity of anti-Bartlett trustee immunity clauses.
Why Choose Bermuda for Private Clients?
In this Expert Focus for Chambers & Partners, Bermuda Associates Anne Campbell and Grace Quinn discuss how the jurisdiction exhibits a determined attitude with respect to its own development, and is the jurisdiction of choice for many private clients to establish trusts.