Trustee (Amendment) Act, 2021

Summary

This Act amends the BVI Trustee Act (Cap. 303) to modernise several areas of trust law, including court powers to vary trusts and set aside flawed exercises of fiduciary powers, the effect of reserved or granted settlor powers, choice-of-law rules for trusts, and a new statutory duty on trustees to keep records and underlying documentation.

• Court powers to vary trusts (new s.58B): Gives the BVI Court power, on application by a trustee, protector or beneficiary, to vary, add to, revoke or replace trusts or trustee powers where expedient, for trusts created after commencement (if the instrument so provides) or trusts that changed governing law to the Virgin Islands.
• Setting aside flawed exercises of fiduciary power (new s.59A): Allows the Court to set aside a fiduciary power exercise where the power-holder failed to take into account relevant considerations or took into account irrelevant ones, applicable to powers exercised before, on or after commencement.
• Reserved or granted powers (substituted s.86): Confirms that a settlor reserving, or granting to another person, beneficial interests or powers (e.g. to revoke, amend, direct investments, appoint/remove trustees) does not invalidate the trust or bring trust property into the settlor's estate on death.
• Choice of law and definitions (s.83A amendments): Adds and revises definitions (beneficiary, office holder, persons internal to the trust relationship, personal relationship) and clarifies which matters are governed by the proper law of the trust versus other jurisdictions' laws.
• Record-keeping duty (new s.92A): Requires every Relevant Trustee (a BVI company, a foreign company registered under Part XI of the BVI Business Companies Act, a BVI-resident individual, or any other trustee administering a trust wholly or partly from within the Virgin Islands) to maintain records and underlying documentation of an Applicable Trust, wherever located, for at least five years, appropriate in form to the trust and trust property. Non-compliance is a criminal offence.
• Third-party protection (s.95 amendment): Removes protection for a third party dealing with trust property where that third party acted dishonestly in the transaction.
• Existing trusts opting in (s.104 amendment): Allows trustees of trusts created before the relevant Part came into force to elect by deed to have that Part apply to their trust.

The Act comes into force on a date to be appointed by the Governor by Proclamation, except for section 11 (the new record-keeping section 92A), which is deemed to have come into force on 30 March 2015.

Key obligations

• Every Relevant Trustee of an Applicable Trust must maintain records and underlying documentation of the trust, whether held within or outside the Virgin Islands.
• Such records and underlying documentation must be retained for at least five years from the date they came into the trustee's possession/control or were prepared by the trustee, and must be in a form appropriate to the trust and trust property.
• Failure to comply with the record-keeping duty under new section 92A is an offence punishable on summary conviction by a fine not exceeding ten thousand dollars.
• Trustees of trusts created before the relevant Part came into force may, by deed, elect to have that Part apply to their trust (an optional, not mandatory, action).

Applies to

trustees, trust companies, BVI-incorporated companies acting as trustees, foreign companies registered under Part XI of the BVI Business Companies Act acting as trustees, individuals resident in the Virgin Islands acting as trustees, settlors, beneficiaries, protectors and other office holders under trusts

Deadlines

• at least five years from the date the records/documentation came into possession or were prepared: Minimum retention period for trust records and underlying documentation under new section 92A.
• 30th day of March, 2015: Deemed commencement date for section 11 (new section 92A record-keeping duty).
• date to be appointed by the Governor by Proclamation: General commencement date for the remainder of the Act (other than section 11).

Related documents

• This document amends Trustee Act (Revised Edition 2020)