Frequently Asked Questions: Trusts & Foundations

Clear answers on Gibraltar trusts and Private Interest Foundations — how they work, when to use each, tax treatment, asset protection, and the role of trustees, protectors, and foundation councillors.

• What is the difference between a trust and a foundation?

  A trust is a common-law arrangement in which a settlor transfers assets to trustees who hold and manage them for the benefit of identified or ascertainable beneficiaries. A foundation is a civil-law entity with its own legal personality: assets are transferred to the foundation itself, which is governed by a council under a registered charter. Trusts are more familiar to clients from common-law backgrounds (UK, Australia, Caribbean); foundations are the preferred structure for clients from civil-law jurisdictions (continental Europe, Latin America, the Middle East) who are unfamiliar or uncomfortable with the concept of a trust.

• Which is better — a trust or a foundation?

  The choice depends on the client's legal background, jurisdiction of assets, and whether the courts of the client's home country recognise trusts. For UK-connected clients and those from common-law jurisdictions, a trust administered by a Gibraltar trustee is typically simpler and more familiar. For clients from civil-law countries — particularly where trusts are not recognised — a Private Interest Foundation provides the same asset-holding and succession functions in a form that courts and banks in their home country understand.

• What is the perpetuity period for a Gibraltar trust?

  Gibraltar abolished the rule against perpetuities for trusts established under Gibraltar law, meaning a Gibraltar trust can be established to continue indefinitely. This is particularly useful for dynastic family structures and charitable purposes where the intention is for the trust to endure across multiple generations without requiring periodic reformation.

• What is a Private Trust Company (PTC) and when is it used?

  A Private Trust Company is a Gibraltar company established specifically to act as trustee of one or more family trusts. Unlike a licensed professional trustee, a PTC acts solely for a single family or connected group of trusts and is exempt from the requirement to hold a GFSC trustee licence. PTCs are used where a family wants greater control over trustee decision-making while maintaining a regulated professional as administrator or governance support. Resilience Group typically acts as administrator or governance support for PTC structures.

• Does a Gibraltar trustee need to be licensed by the GFSC?

  Yes. Any person or entity carrying on the business of a trustee in or from Gibraltar must be licensed by the GFSC under the Financial Services (Investment and Fiduciary Services) Act. Resilience Group holds a GFSC trustee licence and is subject to GFSC supervision, ongoing capital requirements, and conduct standards. Private Trust Companies acting for a single family are exempt from this licensing requirement.

• What are the typical costs to establish and administer a Gibraltar trust?

  Establishment costs for a Gibraltar trust typically include legal fees for drafting the trust deed (£2,000–£8,000 depending on complexity), trustee acceptance and setup fees, and any asset transfer costs. Annual administration fees depend on the complexity of the trust assets and activity, but typically range from £3,500 to £15,000 per year for a standard discretionary trust. More complex structures holding companies, property, or investment portfolios attract higher fees.

• How is a Gibraltar trust taxed?

  A Gibraltar trust administered by a Gibraltar trustee is subject to Gibraltar tax on income accruing in or deriving from Gibraltar, at the standard rate of 12.5%. Non-Gibraltar-source income and capital gains are not subject to Gibraltar tax. The tax treatment in the beneficiaries' country of residence is a separate question determined by that country's laws — this is particularly important for UK, US, and EU-resident beneficiaries who should obtain local tax advice.

• Do UK anti-avoidance rules apply to Gibraltar trusts?

  Yes — where settlors or beneficiaries are UK tax-resident, a number of UK anti-avoidance provisions may apply to a Gibraltar trust. The Transfer of Assets Abroad rules can attribute trust income to a UK-resident settlor; the Settlements legislation can attribute income to a settlor who retains an interest; and the HMRC offshore trust rules impose capital gains and income tax charges on UK beneficiaries who receive benefits. Specialist UK tax advice must be obtained alongside any Gibraltar trust structuring.

• What is a protector and what role do they play?

  A protector is an individual or entity appointed under a trust deed to oversee the trustees and hold specified powers — most commonly the power to remove and replace trustees, approve or veto certain trustee decisions, and add or remove beneficiaries. The protector provides a layer of governance and comfort for the settlor and family without themselves being a trustee. Protector powers must be carefully drafted to avoid creating a fixed interest in the trust assets or undermining the trustees' discretion.

• What is a Gibraltar Private Interest Foundation?

  A Gibraltar Private Interest Foundation is a statutory entity created under the Foundations Act 2012. It is a separate legal person — not a trust — that can own assets, open bank accounts, and enter contracts in its own name. The foundation is governed by a foundation charter (its constitutional document), a council (equivalent to a board of directors), and optional protector or guardian roles. It is used for wealth preservation, succession planning, and holding structures, particularly for civil-law clients.

• What is the foundation charter and what does it contain?

  The foundation charter is the public constitutional document of a Gibraltar foundation, filed with the Gibraltar Companies Registry. It sets out the foundation's name, purpose, the details of its council members, and its founding assets. A private regulations document (not filed publicly) contains the detailed operational rules, distribution provisions, and beneficiary details. The charter must be signed by a GFSC-licensed foundation councillor such as Resilience Group.

• Who is the foundation council and what do they do?

  The foundation council is the governing body of a Gibraltar foundation, responsible for managing foundation assets and making distributions in accordance with the foundation's purpose and private regulations. At least one council member must be a GFSC-licensed foundation councillor (Resilience Group holds this licence). The founder may also appoint additional council members, including family members, advisers, or trusted individuals, to participate in governance.

• Are foundations better than trusts for civil-law clients?

  For clients from civil-law countries — France, Germany, Spain, Italy, the Middle East, or Latin America — foundations are generally more familiar and more readily accepted by local courts, tax authorities, and banks. The absence of a trust concept in civil law means that a trust structure may be recharacterised or challenged in the client's home jurisdiction, whereas a foundation's status as a legal person is more universally recognised. The legal and tax analysis of the client's home jurisdiction should always be conducted before choosing a structure.

• How do trusts and foundations help with asset protection?

  Properly constituted trusts and foundations can protect assets from future creditors, divorce proceedings, and forced heirship claims by placing legal ownership with the trustee or foundation rather than the individual. Gibraltar's Fraudulent Dispositions Act provides a two-year limitation period for creditor challenges: transfers of assets to a trust or foundation made more than two years before a creditor claim arose are generally not voidable. Structures must be established before any claim or foreseeable liability arises to be effective.

• How do trusts and foundations support succession planning?

  Trusts and foundations allow a settlor or founder to establish a framework for the management and distribution of wealth across generations, outside of the probate process and without the need for a will in each jurisdiction where assets are held. Assets held in a trust or foundation pass according to the trust deed or foundation regulations, not the laws of the settlor's domicile, which provides certainty and avoids the cost and delay of multinational probate.

• Do Gibraltar trusts and foundations need to be registered?

  Trusts administered by GFSC-licensed trustees do not appear on a public register, though the trustee must maintain proper records and beneficial ownership information must be disclosed to the GFSC and competent authorities for AML purposes. Foundations must be registered with the Gibraltar Companies Registry (charter only — private regulations are not public). Both structures must comply with CRS and FATCA reporting requirements where they hold financial assets for third parties.

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