Guernsey is set to add foundations to the "toolkit" available to its legal and financial services industry. This article examines the thinking behind the new legislation and how advisors might use these structures.

Guernsey is set to add foundations to the "toolkit" available to its legal and financial services industry. This article examines the thinking behind the new legislation and how advisors might use these structures. The second part of this feature is to follow tomorrow.

As international financial centres, the UK Crown Dependencies compete vigorously with their peers on the world stage in terms of introducing new products and services, and are known for their innovation. Guernsey, however, is soon to introduce not one, but two new pieces of legislation which look set to become big business for the island’s financial and legal sectors.

While most eyes might be on Guernsey’s imminent overhaul of its Intellectual Property regime to offer better image rights protection for celebrities, it is the island’s coming introduction of foundations which has its fiduciary sector excited. Guernsey’s proposed Foundations Law promises to be a game changer which will lay to rest some of the previous negative connotations surrounding the use of foundations, industry experts told WealthBriefing during a recent trip to the island.

The six-week consultation period for Guernsey’s proposed Foundations Law finished on 23 May and the final law will go before the island's government next week for approval. If passed (as expected) and ratified by the UK Privy Council, it is hoped that clients will be able to deploy Guernsey foundations by early next year. It is a long-awaited piece of legislation which has been kicked around by the island’s legal industry and government for several years, and will put Guernsey on a level-footing with Jersey, which introduced foundations in 2009. Guernsey’s Trust Law Revision Working Party first identified an increasing interest in a locally-regulated foundations back in 2004. The States of Guernsey - the island’s legislative body – then approved the concept in 2006, alongside revisions to the island’s trust law; law officers, regulators and industry representatives have been working on finalising the consultation draft of the foundations law for the past five years.