Guernsey Substance Requirements Update – Foundations

Amendments to Guernsey's new substance regulations, which came into effect on 1 January 2019, have provided much needed clarity regarding the treatment of Guernsey foundations under the new legislation and have confirmed that they are outside the scope of the new substance requirements.

When the new substance requirements legislation was first introduced, trusts and partnerships were outside the scope of the new requirements and companies were in scope. However, the position of foundations was not clear, owing to the fact that Guernsey's Revenue Service take the view that a foundation falls within the definition of a company for tax purposes. On this basis, foundations were also potentially within scope of the new substance requirements.