As virtually every treatise on the subject reminds us, trusts are a quintessentially English invention. Texts often quote a French lawyer’s observation that “the trust is the guardian angel of the Anglo-Saxon, accompanying him everywhere, impassively, from the cradle to the grave” to reinforce this point . But while trust law’s origins are certainly English, trust law’s centre of gravity has shifted and modern trust law is not only not exclusively English, but its most important developments take place in jurisdictions outside Great Britain, including in the Caribbean.
If we evaluated trust law based on the jurisdiction for case law citations, we’d still have a picture of a predominantly English body of law. But if we look at the jurisdiction of the courts creating judgments in the most important decisions, and at which jurisdictions have intervened by statute to introduce innovations, a different picture emerges. Thus, while many of the people shaping trust law’s future continue to have an English connection, including lawyers and judges who received some or all of their legal training in Britain, and the body of English precedent continues to be influential, trust law is now international.
As the development of non-charitable purpose trusts, flight clauses, statutory Hastings-Bass doctrines, and a host of other innovations attest, it is outside Britain’s borders that trusts are evolving into methods of solving the problems of individuals, families, and businesses for today and tomorrow. This development should be welcomed, because it means trust law is evolving in an environment where experimentation can occur and where those in need can take full advantage of trusts’ flexibility.
Establishing The Baseline
World War I led to substantial income taxes on wealthy individuals in the United Kingdom, and this sparked a tax avoidance industry based on moving people or assets out of Britain into more hospitable jurisdictions. As early as 1923, discussions between the UK and Jersey were underway, with John Anderson, then Permanent Undersecretary of State at the Home Office, writing to Alexander Coutanche, then a member of the States in Jersey and later Bailiff, about what the UK government saw as a matter “of urgency”: “The avoidance of UK taxation by British subjects who make use of the Channel Islands for this purpose” was causing the Treasury “[v]ery considerable losses,” which were “likely to increase in future as the means of avoiding taxation become better understood.” 
Trusts played an important role in these tax strategies, because under British law at the time, they effectively removed assets and the income they generated from UK taxation, so long as the income was not remitted to anyone in the UK. As estate taxes rose as well, offshore trusts played an increasing role in avoiding that tax. And when British colonies began to gain independence and British residents of those colonies looked for a safe home for their assets, where they would be protected from both the grasp of the new, independent governments in the former colonies and from an increasingly revenue-hungry UK government, they found that offshore jurisdictions offered both solid banks and more attractive tax rates.
Trusts facilitated tax and estate planning strategies and the ‘tax havens’ (as they were then known) receiving the funds needed no more than their English legal inheritance, competent lawyers and trustees, and connections to UK-based tax advisors, lawyers, and bankers to play their role. Competition for the business led to some statutory measures to clarify that trust law offshore operated in much the same way as trust law in England and Wales.
For example, offshore pioneer Milton Grundy’s 1972 guide to jurisdictions summed up Bahamian trust law as “in most respects similar to trusts which can be created under English law” except for a longer perpetuities period . And for creating a standard trust, the law in one Commonwealth jurisdiction remained (and still remains) much the same as in other Commonwealth jurisdictions, although local variations were enough to lead Grundy to confide in the 1997 edition of his guidebook that he had refrained from choosing a jurisdiction because he did not want to have to get “my mind round yet another Trust Law.” 
At the same time, trusts were becoming less useful as a means of avoiding British taxes. As early as the 1920s, Britain began incorporating anti-avoidance measures into UK tax law. By the 1990s, there were provisions specifically aimed at reducing or eliminating the tax advantages of trusts established outside the UK for UK residents and changes to UK tax law to eliminate offshore trust law’s advantages by rationalising British law (eg relief from capital gains tax on trading company shares instituted in the 1990s). 
Changing attitudes at HMRC also played a role, so that by the 2010s, offshore trustees could no longer “be cavalier about UK tax compliance obligations” and rely on “HMRC tacitly accept[ing] that there was little they could do to enforce the tax liabilities of non-residents.”  The offshore trust as a tax avoidance device was, if not a dying industry, then at the very least, one where substantial future growth was not likely.
Taking The Lead
The shift of trust law’s centre of gravity came gradually. For jurisdictions with a constitutional tie to Britain, the reception of English trust law was a matter of course. The first step toward developing a trust industry often came as offshore jurisdictions adopted procedural trust statutes that closely followed English statutes, such as BVI’s Trustee Ordinance 1961 and Cayman’s Trust Law 1967. Statutory modifications – extending perpetuities and accumulation periods, establishing ‘exempt trusts’ free from local taxation, and so on – did not alter anything fundamental about the body of English trust law.
Jersey’s adoption of a substantive trust law in 1984 inspired many jurisdictions to follow suit (often closely following the language of Jersey’s statute). Jersey’s comprehensive restatement of trust law’s substance created a model for jurisdictions where local jurisprudence was thin to give confidence to those considering anything more complex than a simple trust. In the Caribbean, Anguilla, Belize, and Turks & Caicos passed legislation closely modeled on Jersey’s statute, while many other jurisdictions adopted partial or independent statutory restatements.
The next step came with the adoption of legislation mandating licencing of trustees and other financial services providers, often as part of the establishment of independent regulators in the 1990s. These statutes helped speed a professionalisation of the trustee industry, transforming it from one dominated by individuals and small firms to one in which professional trustee service providers are often large entities such as JTC Group, which is publicly traded, has three of its sixteen IFC jurisdiction offices in the Caribbean, and has over 1,700 employees worldwide. While not every trust services provider operates on JTC’s global scale, if Caribbean jurisdiction trustees from 1970 were deposited in any IFC today, they would have trouble recognising the modern trust services business as being the same one they had known.
The real burst of creativity came with the development of non-charitable purpose trusts, in particular in Bermuda, the British Virgin Islands, and the Cayman Islands. These statutory trusts sidestepped English law’s categorical rejection (at least in the twentieth century) of such trusts . Anton Duckworth, the key figure in Cayman’s development of the STAR trust, wrote that the drafters’ research “led us to the conclusion that by historical accident the English trust has developed some unnecessary, uncertain and (in some respects) inconsistent restrictions which reduce its flexibility and utility.”
Determined not to mess with the success the principles of English trust law had provided Cayman, they “established a complete separate trust regime freed of these restrictions.”  Versions of purpose trust legislation have also been adopted in at least fourteen other Caribbean jurisdictions.
Offshore jurisdictions, particularly in the Caribbean, have also been at the forefront in developing legislation to prevent attacks on trusts formed in their jurisdictions, such as Cayman’s 1996 legislation that excluded foreign law in the determination of the validity of Cayman trusts. Legislation supporting asset protection trusts has been adopted in at least seventeen Caribbean jurisdictions. Several, including the Bahamas, Bermuda, BVI, and Cayman, have also followed Jersey’s lead in adopting statutory Hastings-Bass rules, and restating and revising the law of mistake in the wake of England’s abandonment of the Rule in Hastings-Bass in Pitt v Holt  UKSC 26. The adoption of “common law foundation” statutes by a number of Caribbean jurisdictions is also expanding the boundaries of “trust-like” structures. 
The Way Forward
Creating new trust legislation is a sphere in which IFCs have a major advantage over larger jurisdictions. The UK Parliament’s time is rarely available for technical changes to trust law, while IFC legislatures – aware of the value to the jurisdiction of the financial sector – are more willing to make time to consider such measures. The shift of the centre of gravity away from Britain is not just a statutory phenomenon. Because the IFC trust industry has grown into a sophisticated one while the English trust industry remains focused on routine issues, both the drafting of IFC trust documents and litigation over IFC trusts in IFC courts are attracting sophisticated lawyers from the UK and elsewhere, who seek to participate, both by relocating and by appearances in matters in IFCs.
Judges in IFCs are likely to see more trust cases than UK courts, both in contentious matters and where trustees seek the courts’ blessing, and are also likely to be more attuned to the issues in sophisticated financial industry controversies than most of their onshore colleagues. As a result, a number of IFC judges, including many in the Caribbean, have acquired international reputations for their expertise.
The shift of trust law’s centre of gravity towards IFCs generally, and Caribbean IFCs in particular, has three consequences for the law and the region.
First, it should lead to a recognition that these jurisdictions are meeting a need that few, if any other, onshore jurisdictions are capable of satisfying. The evolution of the non-charitable purpose trust into an important component in asset securitisation strategies, for example, is making it easier to unlock value for businesses that would otherwise be tied up for years.
Second, the increasing interconnections between the UK bar and IFCs should provide IFCs with an ally in the UK to help persuade future UK governments to tread carefully in anti-avoidance efforts, particularly the blunderbuss-type often favored by the OECD.
And finally, by providing a laboratory where new innovations – such as the common law foundation – can be experimented with, quickly adjusted in light of experience, and overseen by experienced regulators, IFCs are speeding the evolution of the law in providing solutions to new problems.
1 Pierre Lepaulle quoted in D. J. Hayton, THE LAW OF TRUSTS (4th ed.) 2 (Sweet & Maxwell 2003).
2 Quoted in Richard Anthony Johns, TAX HAVENS AND OFFSHORE FINANCE: A STUDY OF TRANSNATIONAL ECONOMIC DEVELOPMENT 84 (Frances Pinter 1983).
3 GRUNDY’S TAX HAVENS: A WORLD SURVEY 16 (Milton Grundy, ed., 2nd ed., 1972).
4 OFFSHORE BUSINESS CENTRES: A WORLD SURVEY ix (Milton Grundy, ed., 7th ed., 1997).
5 Giles Clarke, OFFSHORE TAX PLANNING 8 (Tolley 2013) (discussing TCGW 1992’s definition of “defined person” as “the most far-reaching anti-avoidance legislation directed at trusts, whether resident or non-resident.”); Clarke 2013 at 44 (““There is no doubt that the hey-day of offshore trusts for UK domiciliaries was the decade up to 1991. That year saw the first curtailment of the advantages of such trusts, namely the enactment of the CGT settlor charge, now TCGA 1992, s 86).
6 Giles Clarke, OFFSHORE TAX PLANNING 79 (Lexis Nexis/Tolley 2019).
7 Paul Baxendale Walker makes a convincing case that England’s rejection of the noncharitable purpose trust in 20th century case law was based on a misreading of precedent, but he concedes that at this point it would take legislation to undo the courts’ rejection of the concept. Paul Baxendale-Walker, PURPOSE TRUSTS (Butterworths 1999)
8 Quoted in Baxendale Walker, supra, at 260.
9 Andrew P. Morriss, Private Foundations in the Common Law Caribbean: Variations on a Theme, IFC Review (Sept. 8, 2021).
Andrew Morriss is Professor of the Bush School of Government & Public Service and School of Law at Texas A&M University. Prior to this position, he was the Dean of the Texas A&M School of Innovation, the Dean of the Texas A&M School of Law, the D. Paul Jones & Charlene A. Jones Chairholder in Law at the University of Alabama, the Ross & Helen Workman Professor of Law at the University of Illinois, and the Galen J. Roush Chair in Law at Case Western Reserve University.