On 30 March 2015 more stringent record-keeping regulations for BVI domiciled trusts entered into force, through an amendment to the Trustee Ordinance, Cap 303. The new regulations, which apply to all types of BVI trusts, including VISTA trusts, have been introduced to comply with OECD recommendations. Similar requirements have already been implemented for BVI companies and limited partnerships.
The New Requirements
Trustees of BVI trusts must now maintain records and underlying documentation of the trust for a period of at least five years. The records must be sufficient to show and explain all trust transactions and to enable the trust’s financial position to be determined with reasonable accuracy.
Definition of “Records” and “Underlying Documentation”
“Records” and “underlying documentation” include accounts, invoices, contracts or similar documentation that show:
- the value and detail of receipts and expenses
- all sales and purchases and other transactions
- the assets and liabilities of the trust
Penalties
Trustees that fail to comply with the new requirements can be penalised with either a fine of up to US$100,000 or up to 5 years’ imprisonment.