How do trusts and foundations work in Gibraltar?

Legal framework

The Trustee Act 1999 is the principal statute governing trusts in Gibraltar. It draws substantially on English trust law — the rules of equity, common law trust precedent, and English judicial decisions remain highly persuasive in Gibraltar courts. The Act modernises the trustee's investment powers (statutory general power of investment), addresses appointment and retirement of trustees, sets out the duties of care, and provides a framework for trust protectors and letter of wishes. Equitable principles not codified in statute continue to apply by virtue of Gibraltar's common law reception.

Perpetuity period

A Gibraltar trust can subsist for a maximum of 100 years from establishment. This 100-year perpetuity period is fixed by statute and applies to all new Gibraltar trusts. Discretionary trusts must distribute or terminate within this period. The 100-year period provides meaningful multi-generational planning flexibility while remaining within the statutory limit. It is longer than many comparable jurisdictions, though some offshore centres (Cayman Islands, BVI) have moved to indefinite or purpose-trust perpetuity.

Trust types

Gibraltar accommodates the full range of trust structures recognised in English equity: discretionary trusts (no fixed entitlements; trustee exercises discretion over distributions), fixed interest trusts (beneficiaries have defined interests), bare trusts (nominee arrangements), purpose trusts (non-charitable purpose trusts are permitted in Gibraltar), and protective trusts. The most common structure for wealth planning is a discretionary trust with a letter of wishes guiding trustee distributions to a defined class of beneficiaries.

Trustee duties and investment powers

Trustees owe fiduciary duties to beneficiaries: to act in the best interests of beneficiaries, to exercise the standard of care of a reasonably prudent trustee, to invest trust assets on a portfolio basis, to avoid conflicts of interest, and to keep accurate accounts. The Trustee Act 1999 grants trustees a broad statutory power of investment in any kind of investment, subject to the standard investment criteria (suitability and diversification). Trustees must obtain and consider proper investment advice when making investment decisions.

What is a Gibraltar private foundation?

A Gibraltar private foundation is a body corporate incorporated under the Private Foundations Act 2017. It is established by a founder who contributes initial assets to the foundation under a foundation charter and regulations. Unlike a trust — where the trustee holds assets on behalf of beneficiaries — the foundation holds assets in its own name. It has legal personality, can enter into contracts, hold property, and bring legal proceedings in its own right. The foundation is governed by a council of councillors rather than trustees.

Foundation charter and regulations

A foundation is established by registering a foundation charter with the Gibraltar Companies Registry. The charter states the foundation's name, its purpose or the identity of its beneficiaries (which may be a class), the initial endowment, the composition of the council, and the duration (which may be indefinite or time-limited). Private regulations — not filed with the Registry and therefore confidential — set out the detailed governance rules, distribution policy, and any reserved powers of the founder or a guardian.

Council of councillors

The foundation council governs the foundation. At least one councillor must be a GFSC-licensed foundation councillor. The council is responsible for administering the foundation in accordance with the charter and regulations, making distributions to beneficiaries, maintaining accounts, and complying with AML/KYC and reporting obligations. A guardian may be appointed to oversee the council and protect beneficiary interests — analogous to a protector in a trust structure.

Civil law client suitability

The foundation structure is particularly well-suited to clients from civil law jurisdictions — continental Europe, the Middle East, Latin America, and East Asia — where the trust concept has no direct statutory equivalent and may not be formally recognised. A foundation, as a body corporate with separate legal personality, is conceptually familiar to civil law practitioners and may receive more favourable treatment under civil law inheritance and forced heirship rules than a trust would. This makes foundations a practical planning tool for internationally mobile families with civil law home jurisdictions.

Legal personality

A trust is not a legal person — it is a relationship between the trustee (who holds legal title to the assets) and the beneficiaries (who hold equitable interests). The trustee contracts, holds property, and litigates in their own name as trustee. A foundation is a body corporate with full legal personality. It holds assets and enters into contracts in its own name. This distinction matters for banking relationships, property registration, and the treatment of foundation assets under civil law succession rules.

Registration and privacy

Gibraltar trusts are not registered on any public register. Trust documents are private. A foundation must register its charter (but not its regulations) at the Companies Registry, creating a degree of public record of the foundation's name, purpose, and registered agent. The regulations — which contain distribution provisions, beneficiary details, and reserved powers — are confidential and are not filed publicly.

Governance

A trust is governed by its trustees in accordance with the trust deed and the Trustee Act 1999. A trust protector or enforcer may be appointed to oversee trustee conduct. A foundation is governed by its council of councillors in accordance with its charter and regulations. A guardian (equivalent to a protector) may be appointed. Both structures allow the founder or settlor to retain a degree of influence through reserved powers or a letter of wishes, but unlimited control over distributions would undermine the intended separation of assets.

Private Trust Company (PTC)

A Private Trust Company is a Gibraltar company incorporated specifically to act as trustee of one or more identified trusts — typically for a single family. The PTC does not provide trustee services to the general public. Because it acts exclusively for identified trusts and does not solicit business, it is not required to hold a GFSC trustee licence. The PTC's board typically comprises family members or family advisers alongside professional directors. A licensed administration firm — such as Resilience Group — typically acts as the PTC's administrator, providing governance, regulatory compliance, accounting, and AML/KYC services to the PTC itself.

GFSC trustee and foundation councillor licensing

Any person or entity providing trustee or foundation councillor services in or from Gibraltar in the course of a business must hold a licence issued by the GFSC under the Financial Services Act 2019. This is a personal regulatory requirement — individuals must demonstrate fitness and propriety, and firms must meet minimum capital and operational standards. Resilience Group holds both a trustee licence and a foundation councillor licence. The GFSC supervises licensed trustees and councillors through periodic inspections, AML/CFT reviews, and annual returns.

UK anti-avoidance considerations

UK-resident or UK-domiciled settlors who transfer assets to a Gibraltar trust remain within scope of UK anti-avoidance legislation. Relevant provisions include the settlor-interested trust income tax rules (sections 624–627 ITTOIA 2005), which attribute trust income to the settlor where they or their spouse can benefit. The transfer of assets abroad provisions (sections 718–747 ITA 2007) can attribute income to the settlor where the transfer has produced income for a person abroad. Inheritance tax on relevant property trusts (sections 58–85 IHTA 1984) imposes ten-year anniversary charges and exit charges. UK trust tax rules are complex and require specific legal advice before any offshore trust is established by a UK-connected person.