The Recognition of Trusts Act 1987 is a
UK Act of Parliament
In the United Kingdom an act of Parliament is primary legislation passed by the Parliament of the United Kingdom.
An act of Parliament can be enforced in all four of the constituent countries of the United Kingdom, UK constituent countries (E ...
that requires and entitles that courts in the United Kingdom recognise the validity of trusts which are created abroad.
The Act implemented the
Hague Trust Convention
The Hague Convention on the Law Applicable to Trusts and on their Recognition, or Hague Trust Convention is a multilateral treaty developed by the Hague Conference on Private International Law on the Law Applicable to Trusts. It concluded on 1 ...
, agreed internationally in 1985. It has recently come under scrutiny for the propensity to perpetuate
tax avoidance
Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdict ...
, and the shift of vast sums of money to offshore tax havens.
Contents
Schedule 1, article 6, states the settlor of a trust has the right to choose any foreign trust law to govern a trust. Art 18 goes on to say that provisions of the schedule are inapplicable if it would be ‘manifestly incompatible with public policy’.
{{Expand section, date=December 2013
See also
*
English trust law
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across th ...
*
UK company law
The United Kingdom company law regulates corporations formed under the Companies Act 2006. Also governed by the Insolvency Act 1986, the UK Corporate Governance Code, European Union Directives and court cases, the company is the primary legal ...
English trusts law