Jersey law permits a purpose trust to be established with a particular purpose stated in the trust instrument and for which there are no ascertainable beneficiaries.

Principal features of Jersey purpose trusts


The trust must have an enforcer, who must be a different person from the trustee. It is the duty of the enforcer to enforce the trust.


The trust may exist indefinitely. If there is a termination date the trust property can be distributed to persons or charities.


There are no particular formalities for the creation of a purpose trust. There is no requirement for the trust to be registered in Jersey or for the trust document, or its

particulars, to be filed with any governmental or other authority.


The purpose trust, by definition, has no ascertainable beneficiaries during its existence.


There is no requirement that the trustees have to be resident in Jersey.


The purpose is to be set out in the trust. The purpose does not have to be charitable.

Uses of Jersey purpose trusts

The potential uses for purpose trusts in Jersey are not limited but include:

Special Purpose Vehicles ("SPVs")

The use of Jersey as an offshore centre for SPVs is well established. Typically in such cases, a Jersey law trust is utilised to enter into (either directly or through an underlying company) securitisation or debt defeasance transactions. Assets of all types are repackaged and securitised, including rental streams and credit card and other receivables.

The use of SPVs can be of great benefit to the original owner, the issuer and the investor. These will often include the benefit to the owner of removing the asset from its balance sheet and the attraction to the issuer and the investor of an asset backed security which is not subject to general commercial credit risk and which can therefore achieve a good credit rating.

Typically the SPV is owned by trustees in Jersey who declare themselves trustee of the initial trust property which is utilised to establish the SPV. The transactions of the SPV will often be matched so that no significant profit is retained within the SPV, but rather sufficient is directed to the SPV to cover administration costs and to provide for an element of benefit to be paid out to charities as beneficiaries of the trust.

The use of the charitable trust in this context has been commonplace but it is likely that in many cases purpose trusts may often be used for these types of structures instead.

A purpose trust might, for example, stipulate the purpose of the trust as being to establish an underlying company, and to enter into agreements relating to a specific transaction. Often there will be no net assets left within the structure after the consummation of the transactions and discharge of associated costs, but where there are surplus assets (usually the shares in the underlying company or the proceeds of the liquidation of those shares) they can be distributed to beneficiaries or charitable purposes at the expiration of the trust period.

Private trust companies

A purpose trust could be formed to incorporate and hold shares in a private trust company to act as trustee of one particular trust or group of trusts.

Quasi-charitable purposes

Settlors often wish to use part of their wealth to further worthy or philanthropic causes, but which might not fall within the strict and complex rules of charity. A Jersey purpose trust could be utilised instead.

Tax treatment

Purpose trusts will be entirely free of tax in Jersey whether or not the trustees are resident in Jersey provided only that no Jersey resident (other than a charity) has an interest, whether during or at the end of the Trust period, in the purpose trust.