Advanced Notice - Changes to the Fiduciary Annual Return

Additional Question

The 2023 Fiduciary Annual Return, which will be available on licensees' timelines on 27 May 2023, includes the following additional question:

Breakdown of business by geography for trusts, foundations, companies and partnerships.

Currently fiduciary licensees are required to identify the country of residence of the settlor of a trust, the founder of a foundation or the beneficial owner of a company but this change means that they will also be required to identify the geographic location of the structures to which they provide services.

The geographic location includes the proper law of a trust or settlement as stated in the trust deed or the jurisdiction of incorporation or registration of a foundation, company, limited partnership or limited liability partnership.

The Commission has made this change to fiduciary annual returns, which are due to be submitted in respect of the period ended 30 June 2023, as Financial Action Task Force Recommendations 24 and 25 require countries to:

• assess the money laundering and terrorist financing risks to which their country is exposed, associated with different types of foreign-created legal persons; and
• assess the money laundering and terrorist financing risks associated with different types of trusts and other similar legal arrangements types of foreign legal arrangements that have sufficient links with their country.

The format of the fiduciary annual return submitted by holders of both primary fiduciary licences and personal fiduciary licences has remained unchanged since 2017 when the Commission amended the format of the return so that they could be submitted via the online submissions portal.

Updates to Explanatory Notes

There have also been changes to the explanatory notes within the forms to clarify three points following feedback from industry:

Corporate Services Activities

The explanatory notes have been amended to help avoid double counting. Data on the number of companies to which services are provided should be provided in respect of all companies. However, data on asset values should only be provided on a company, which does not form part of a structure as details of any assets it holds will have been provided in the trust related activities or foundation related activities sections.

Breakdown of business by geography

The explanatory notes have been amended to clarify that this relates to the latest available country of residence of the settlor of a trust, the founder of a foundation or the beneficial owner of a company.

Breakdown of business by client base

The explanatory notes explain that the breakdown of fiduciary turnover between Private Clients and Institutional Clients should equal the figure reported in the licensee’s audited financial statements (a review suggests that up to half of licensees report the breakdown as at the reporting date of the return).

Finally, the explanatory notes have been updated to reflect the provisions in The Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020 following the revision of laws project.

The 2023 fiduciary annual return must be submitted by 31 August 2023.

Should you have any queries, please email [email protected].