Wealth management in Guernsey: private banking, trusts and foundations

St Peter Port, a private banking and trust centre

Wealth management in Guernsey brings together private banks, licensed managers and trustees in St Peter Port who hold and manage multi-currency portfolios, often owned through a trust or foundation. It grew around trusts and offshore private banking for British, European, African and Middle Eastern clients, with banks, asset managers and fiduciary firms often working together around the same family.

Guernsey wealth management grew around trusts and offshore private banking for British, European, African and Middle Eastern clients. Banks, asset managers and fiduciary firms often work together around the same family and its structures.

Managers licensed under investor protection law

Discretionary management and investment advice require a GFSC licence under the bailiwick's protection of investors legislation. Clients can therefore check that their manager appears on the register of licensed entities before signing a mandate.

Three mandate formats at island private banks

Island private banks offer three levels: discretionary management within a risk profile, advisory where the client decides, and order execution without recommendation. Discretionary mandates dominate among trustees, so Guernsey wealth management is often delegated, who delegate management to a professional.

Trusts governed by the 2007 law

The Trusts (Guernsey) Law 2007 governs trusts formed on the island: the trustee, often a licensed fiduciary company, becomes the holder of accounts and portfolios. The bank identifies the settlor, protector and beneficiaries in any private banking in Guernsey relationship, and keeps the trust deed on file.

Guernsey foundations since 2012

Since the Foundations (Guernsey) Law 2012, the island also offers the foundation, valued by families from civil law traditions. The foundation council opens the account and the bank reviews the charter, rules, any guardian and named beneficiaries.

Asset thresholds and fee model

A private banking relationship only pays off above a significant amount of assets under management. Butterfield Bank Guernsey details, depending on the service chosen, the entry threshold, management fees as a percentage of assets and custody fees during the initial meeting.

Multi-currency custody and segregation of securities

Portfolios are held in pounds, dollars, euros or Swiss francs, with securities kept by international custodians. GFSC client asset rules require their segregation, which is separate from the 50,000-pound deposit scheme that covers deposits only.

No local capital gains or inheritance tax

Guernsey levies neither capital gains tax nor inheritance tax. These features apply only on the island: the client remains taxed on income, gains and transfers under the rules of their country of residence and that of their heirs.

Consolidated reporting and statements for tax advisers

Private banks provide periodic valuation statements and an annual tax summary of income and realised gains. This document eases the client's return in their country of residence, provided it is prepared according to that country's income categories.

Source of wealth, CRS and declaration in France

Before accepting a fortune, the bank reconstructs its history: business sale, inheritance, career. It then reports balances each year to the country of residence under CRS, and a French resident declares Guernsey accounts on Form 3916.

Choosing a bank for wealth management in Guernsey

Choosing an institution for wealth management in Guernsey means clarifying what you expect of it: custody of securities, discretionary management, advice, coordination with a trustee or a foundation. Private banks, licensed managers and fiduciary firms often work together around the same family; ask who your main contact will be and how roles are divided between them. Such clarity helps you compare offers properly.

Then check that the manager or adviser appears on the register of entities licensed by the GFSC, because management and investment advice require a licence. Compare the three formats offered, discretionary management, advice and simple execution, as well as entry thresholds and management fees as a percentage of assets. These details are set out at the initial meeting. Ask for these points in writing.

Question the bank about the custody and protection of assets. Portfolios are held in several currencies with securities kept by international custodians, and GFSC rules require the segregation of client assets. This protection is separate from the 50,000-pound guarantee, which covers deposits only. Ask for the difference to be explained to you in writing before committing. Written confirmation avoids later disputes.

Documents and source of wealth for private banking in Guernsey

Before accepting a fortune, the bank reconstructs its history: business sale, inheritance, career, successive investments. Prepare documents that tell this story consistently, with verifiable dates and amounts. The better documented the account, the faster the compliance review, and the less often the bank needs to come back to you to complete the file. This also reduces repeated requests. Keep a copy of everything you hand over.

If the wealth is held through a trust, the bank identifies the settlor, protector and beneficiaries, and keeps the trust deed on file. If it is a foundation, it examines the charter, the rules, any guardian and the named beneficiaries. The trustee or the foundation council then opens the account and signs the documents on behalf of the structure.

Finally, plan for the usual documents: certified identity documents, proof of address, the CRS tax self-certification and a description of tax residences. Ask the bank for the exact list, because it varies by institution and type of structure. A private banking relationship only pays off above a significant amount of assets, which justifies in-depth checks from the outset. Preparing early saves time and avoids rushed decisions.

Common mistakes in Guernsey wealth management

The first mistake is to believe that the absence of capital gains tax and inheritance tax on the island applies to the client. These advantages are strictly local: the client remains taxed on income, gains and transfers under the rules of their country of residence and that of their heirs. Serious planning begins with that distinction. Discuss each point with an independent adviser first.

The second mistake is to choose a mandate without understanding the fees. Management, custody and transaction fees add up, and some services impose an asset threshold. Compare the total cost over several years, not only the advertised percentage. A discretionary mandate suits someone who wants to delegate, an advisory one someone who wants to keep the decision; choose knowingly. Fees compound, so even small differences matter.

The third mistake is to prepare the structure badly. A trust governed by the 2007 law or a foundation created under the 2012 law should serve a precise objective, with identified beneficiaries. A structure set up without reflection prompts questions from the bank and the tax authorities. Take advice from independent professionals before transferring assets into it. That advice is worth far more than its cost.

Tax and follow-up of Guernsey private banking

The private bank provides periodic valuation statements and an annual tax summary of income and realised gains. This document eases the client's return in their country of residence, provided it is prepared according to that country's income categories. Pass it to your tax adviser and keep it with your other supporting documents. A tidy file makes every annual return simpler for your adviser.

Each year the bank reports balances to the holder's country of residence under CRS. A French resident declares Guernsey accounts on Form 3916 and investment income on the tax return. Clients in other countries should check their own rules. If your tax residence changes, tell the bank quickly, because it alters the reporting and sometimes the documentation required. Keep each notification to the bank on record.

Arrange at least one follow-up meeting a year: performance, fees paid, fit with your objectives, changes in the family and the wealth. For trust or foundation structures, check that the decisions of the trustee or council remain documented. Regular dialogue between you, the bank, the trustee and your tax adviser avoids inconsistencies and keeps the arrangement readable. Written notes of each meeting are valuable.