Changing times

  • Author : Rosemary Marr
  • Date : April 2013
ABOUT THE AUTHOR: Rosemary Marr TEP is Vice President of STEP and Senior Trust Director at NedGroup Trust (Jersey) Ltd

Charles Darwin is often said to have written: ‘In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment.’

The Crown Dependencies are the focus of this issue of the STEP Journal, and without exception ‘change’ is featured somewhere in the editorial contributed by members from those jurisdictions. These small territories punch above their weight in the world of international finance and are no strangers to adapting their economies to keep ahead of, or in pace with, their rivals in order to survive and flourish. Over the centuries their people have worked in diverse economic activities such as fishing, shipbuilding, tourism, agriculture and even knitting. Today financial services represent an important, even vital, source of revenue. The Crown Dependencies have been and continue to be adaptable and innovative by creating the right environment (infrastructure, legislation, regulation, expertise, etc) that will act like a magnet to attract profitable financial services businesses that also provide employment for their citizens. A good example of this is explained by Gary Hepburn in his article on the innovative use of Manx trusts to assist with player protection in the e-gaming sector, which the author explains now accounts for around 10 per cent of the Isle of Man’s GDP.

November 2012 saw the Trusts (Amendment No. 5) (Jersey) Law 2012 come into force, the details of which are outlined in a contribution by Steve Meiklejohn, who, as a member of the Trust Law Working Party, looks ahead to possible future changes in Amendment No. 6. He notes that consideration is being given to expressly enshrine the rule in Hastings-Bass in the Trust Law, which will be the focus of the next change.

“The Crown Dependencies continue to be adaptable and innovative”

One of the areas where Guernsey has been embracing change is developing the ‘managed services’ industry, which in the past was reserved for professional firms and international corporates. The author of the article, Michael Betley, considers the reasons for the growth of managed services, which is now attracting privately owned businesses and family offices to the island.

Lucia Perchard outlines changes to property tax legislation that will be brought in by the UK Finance Act 2013 and what this means for the Channel Islands. Obviously the reach of these changes to tax legislation will extend far beyond the Crown Dependencies, affecting trustees, company boards, settlors, beneficiaries and wealth managers, as well as their professional advisors. For most financial institutions, including offshore trust company businesses in the Crown Dependencies, the sweeping changes introduced by the Foreign Account Tax Compliance Act (FATCA) in March 2010 have already focused attention on trust beneficiaries who are specified as US persons. In their comprehensive article, Kurt Rademacher, Samantha Moore and Sloane Jumper explore the final FATCA regulations that were issued by the US Treasury on 17 January 2013. They note that the US Treasury has reported that the UK, Denmark, Mexico and Ireland have all entered intergovernmental agreements (IGAs) with the US, as an alternative to the withholding and reporting regime required under FATCA. We have not heard the last of FATCA by any means, as other governments, including the UK, consider introducing their own versions of the law.

Elsewhere in this edition, Simon Weil provides a review of progress since 2011 of the introduction of living legacies in the UK, and family businesses as well as family offices also feature in some depth.

With apologies to those contributors I have not mentioned, I would like to reserve my (almost) final comments of this editorial to recommend the article by Peter Murley, who comments on the need for change in the Crown Dependencies’ financial services sector. The author explores why change is needed and what we should be doing.

While the great scientist Charles Darwin’s classic book On the Origin of Species dealt with the evolution of life and the survival of species, parallels can be drawn with the businesses with which we are all involved. A multitude of factors affect all of us and the constantly changing and often challenging environment in which we operate. We have to adapt and change accordingly in order to flourish and survive.


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