Gibraltar trusts and companies are fundamental to what we do at Acquarius – truly our “bread and butter” business. Our previous recent article on Foundations set out one of the alternatives where a trust may not be, for whatever reason, precisely what the client has in mind. So, how does a PTC fit in to what Acquarius can offer?

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The traditional trust concept is extremely well known as an ideal tool to deal with clients’ needs, given the benefits around succession, asset protection and other related issues. Based on Common Law, the origins of trusts go back, according to some, to the days of the crusades. Certainly, in the offshore finance world, they have been the backbone, alongside companies, of the range of services provided by most international finance centres worldwide. 

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But, depending on the desired outcome, there is an issue. By their very nature, an individual establishing the trust (the settlor) must give up the legal ownership of all assets settled into Trust. Moreover, control is ceded to a trustee, such as Acquarius. As a fully licensed and regulated Gibraltar trust company service provider of more than twenty-five years’ standing, Acquarius has built an enviable reputation over the years. But for some clients, this may not be enough to trust someone else with your hard-earned assets. This is especially true for those used to a Civil Law environment where trusts do not exist, or if they do, under widely differing rules. As a result, clients are occasionally hesitant to cede control to a trustee. Step forward the PTC. This type of structure may provide a solution that allows a client, or a designated person, an element of control whilst still benefiting from the protection that a trust structure offers.

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At Acquarius, our view extends further. We consider that a PTC structure provides the optimal choice when establishing family offices. A detailed piece on this topic will be published shortly as part of our “Gibraltar Difference” series that will set our thinking here. We believe that over the past decade since the legislation was introduced, Gibraltar has firmly established itself as a leading jurisdiction for the creation of family offices and similar arrangements.

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A PTC may be defined as a vehicle established for the purpose of acting as a trustee to a trust, or to a series of related trusts. Indeed, generally, this is its sole purpose. The word “Private” is crucial as a PTC cannot solicit business from the public, for which of course a licence would be required. 

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Typical use cases for PTCs are family situations where the entity acts as a trustee and retains control over the asset(s) that are now held within a structure. The settlor or family members may act as shareholders of the PTC. As always, advance professional tax advice must be obtained as ownership could complicate tax affairs in a home jurisdiction. Acquarius will establish a PTC in much the same way as regular corporate entities, albeit subject to the additional relevant legislation. The shares of the PTC could be owned by a dedicated Purpose Trust, again managed by Acquarius, who might also provide directors. 

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As with all structures, there are pros and cons. The ability to retain a level of control or at least have a greater say in the overall structure is obviously attractive. That, intertwined with faster decision-making and the ease of doing business, could see PTCs being first to reach the finish line.

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However, PTCs also present their own challenges. Higher costs being one of them, as setting up and maintaining a PTC adds an additional layer on top of an existing planned structure. At Acquarius, we look to agree an overall fee to cover the various elements of the structure. Given this, a PTC may prove to be hugely beneficial under the right circumstances. 

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PTCs can be incorporated in Gibraltar, as well as other jurisdictions including the Crown Dependencies and British Overseas Territories. They are also found “onshore” and are particularly popular in the United States, although of course different rules apply to every jurisdiction. 

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In Gibraltar, PTCs are governed by the Private Trust Companies Act (2015) and must comply with the Companies Act (2014). Companies House Gibraltar defines a PTC as a company set up for the provision of undertaking connected trust business from or within Gibraltar. “Connected” here refers to the administration of a trust solely for the benefit of the settlor and defined individuals. The robust legislation is competitive, and the regulatory environment makes Gibraltar an attractive jurisdiction for PTCs.

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Companies registered as PTCs in Gibraltar must appoint an administrator holding a relevant licence with a local registered address. This is where Acquarius can help! Acquarius will deal with all the necessary paperwork and red tape in both establishing and maintaining a PTC including the underlying assets, no matter how the trust is structured.

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Thus, a PTC could be an ideal option for high-net-worth individuals or families by combining control and management of assets. They can be used in a wide range of situations including philanthropic or charitable purposes. 

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If you or your clients are considering a trust structure but are concerned about losing control, a PTC may be the ideal solution. Reach out to Acquarius for a no-obligation consultation and let us explore how a PTC could be included as part of a wider structure to meet your specific business needs.