Discretionary trust with a private trust company
Where the PTC sits, who controls it, how reserved powers work without collapsing the trust, and why Guernsey's 2025 perimeter guidance matters to families who thought they were unregulated.
The family influences the trustee through the PTC board rather than by controlling the trust directly — the distinction that keeps the trust intact.
- Decisions
- Distribution and investment decisions are made by the PTC board, minuted, and tested against the trust deed and the letter of wishes.
- Distributions
- Cash moves from the underlying companies to the trust, then to beneficiaries at the trustee's discretion.
- Reporting
- Under CRS the trust is usually a financial institution where a professional or private trustee administers it; settlor, protector and benefiting beneficiaries are reportable controlling persons.
- Succession
- Nothing passes under a will. Continuity depends on refreshing the PTC board across generations.
What the PTC is for
Families dislike handing discretion over an operating business to an institutional trustee that does not understand it, and institutional trustees dislike holding concentrated, illiquid, operating risk. A private trust company resolves both. It is a company whose only business is acting as trustee of that family's trusts, with a board that mixes family members, trusted advisers and independent professionals.
Ownership of the PTC is deliberately placed outside the family, usually in a non-charitable purpose trust or a foundation, so no individual owns the trustee of their own trust.
Reserved powers without collapsing the trust
Jersey's Article 9A and the equivalent Cayman provisions allow a settlor to reserve real powers — investment direction, the power to appoint and remove trustees, veto rights over distributions — without invalidating the trust.
The limit is practical rather than statutory. If the settlor in substance still decides everything, a court or tax authority in the settlor's own jurisdiction may treat the assets as still theirs: a sham finding, a settlor-interested charge, or a creditor clawback. The test we apply is whether the trustee has ever declined a request and recorded why.
The 2025 Guernsey perimeter update
Guernsey's regulator clarified in 2025 when a PTC arrangement crosses into licensable fiduciary business, looking at the use of third-party administrators, the fee structure, and how broadly the family is defined. Arrangements set up years ago as unregulated can find themselves inside the perimeter as the family expands.
The fix is usually structural — narrowing the class of trusts served, or moving administration — but it must be done deliberately. Jersey, Cayman and Singapore each operate their own exemption conditions and none of them travel.
CRS: who gets reported
Where a professional trustee or PTC administers the trust, the trust is typically a reporting financial institution, and the settlor, protector and beneficiaries who receive distributions are reportable controlling persons. Where the trust is instead a passive non-financial entity, the reporting happens at the level of the bank or custodian holding its accounts.
Either way, the family's names reach their home tax authorities. Structures should be designed on that basis rather than around it.
UK-connected families after April 2025
The remittance basis was abolished from 6 April 2025 and replaced by a four-year foreign income and gains regime, with the protections that previously shielded offshore trusts settled by non-doms largely withdrawn. Trusts built on the old assumptions may now expose the settlor to income and gains as they arise.
This is the single most common reason we are asked to review an existing PTC structure. Very often the structure is sound and only the tax analysis and distribution policy need rebuilding.
- PTC shares owned directly by a family member, undermining the separation the structure exists to create.
- Board minutes that record decisions but never record deliberation — the first thing a challenger asks for.
- Guernsey or Jersey exemption conditions outgrown as the family widens, pushing the PTC into licensable business.
- Settlor reserved powers exercised so completely that the trustee has never made an independent decision.
- CRS classification never revisited after the trust's asset mix changed.
- Structures built for UK non-doms before April 2025 left unreviewed after the regime change.
Seen in practice
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Why there are two feeders, what the master actually does, where the manager sits, and which entity in the chart carries the economic substance obligation.