Non-Charitable Purpose Trusts In The British Virgin Islands

BACKGROUND

Historically, with limited exceptions, trusts for purposes rather than beneficiaries were refused recognition by the courts. The principal obstacle to recognition was the trustees' duty to account and the fact that this requires beneficiaries to enforce the duty. Charitable trusts were treated as an exception because they could be enforced on behalf of the general public by the Attorney General. There were one or two other limited exceptions (eg trusts for the maintenance of tombs) but these were generally regarded as anomalous.

Most leading offshore jurisdictions have introduced legislation enabling the creation of non-charitable purpose trusts ('purpose trusts') and a great deal of use is made of this legislation, particularly in the commercial context (in order to take advantage of one of the features of such a trust which is that there is no beneficial owner of the trust's assets). Examples of the commercial use of purpose trusts include taking