Step-by-Step Guide to Migrating an Offshore Trust

Migrating an offshore trust is a big decision—part legal surgery, part logistics project, and part family diplomacy. Done well, it preserves continuity, improves governance, and protects assets without triggering unexpected tax or legal consequences. Done badly, it can create a resettlement, taxes, bank account freezes, or even litigation. This guide distills a practical, stepwise approach I use with families, trustees, and advisers to move a trust from one jurisdiction to another with confidence.

What “migrating” a trust actually means

“Migration” is a catch‑all term. There are several ways to move a trust, each with different technical consequences.

Change of governing law and forum: The trustee and relevant parties execute a deed changing the trust’s governing law and court jurisdiction to a new location (if the trust deed allows). This can be done with or without a trustee change.

Change of trustee with continuity: The existing trustee retires; a new trustee in the destination jurisdiction is appointed. Ideally, the trust continues without a resettlement.

Re‑domiciliation/continuation of a trust (where allowed): Some jurisdictions permit a trust to “continue” under their law with uninterrupted identity.

Decanting or re‑settlement: Assets are appointed or transferred into a new trust in the destination jurisdiction with similar terms. This can be simple but risks tax and legal consequences if it counts as a new settlement.

Corporate entity migrations within the structure: If the trust holds companies, you may migrate the holding company’s domicile (e.g., BVI to Jersey) while the trust stays put.

Choosing the right path depends on the trust deed, the laws of both jurisdictions, asset locations, and the tax profile of the settlor and beneficiaries. The goal is continuity without triggering unwanted realization events or losing favorable rights.

When it makes sense to migrate an offshore trust

I see five common drivers:

Legal and regulatory stability: Families move from jurisdictions with political instability or unpredictable courts to stable, reputable IFCs (e.g., Jersey, Guernsey, Cayman, Singapore).

Banking and access: Some banks reduce exposure to certain jurisdictions, making day‑to‑day management painful. Moving to a jurisdiction your banks prefer can unclog onboarding and reduce compliance friction.

Governance upgrades: Migrating can be a chance to adopt modern structures—Cayman STAR trusts, BVI VISTA arrangements, or Singapore reserved powers frameworks—to better handle operating companies or philanthropy.

Tax coordination: Tax positions change as families move countries or as rules evolve (UK deemed domicile, US anti‑deferral rules, Australia section 99B). A migration can align residence, reporting, and treaty access.

Reputation and optics: Some families prefer jurisdictions with leading transparency, independent regulation, and robust court oversight to reduce scrutiny or fiduciary risk.

A quick metric I use: if more than three of the following are true—banking friction, governance frustration, tax uncertainty, or poor local service—migration likely adds value.

Pre‑migration diagnostics: Get the facts on the table

Before touching any legal levers, assemble a dossier. The upfront work saves months later.

Trust deed and all variations: Confirm powers to change governing law/trustee, protector consents, reserved powers, appointment/removal mechanics, perpetuity period, and distribution clauses.

Letters of wishes and side letters: Identify any directions that may conflict with new jurisdictional rules.

Parties roster: Settlor(s), protector(s), investment adviser(s), appointor(s), enforcer (for purpose trusts), and all beneficiaries (including minors and issue per stirpes).

Asset inventory with situs: Bank accounts, brokerage, real estate, private companies, LP/LLC interests, IP, insurance, loans, art, and digital assets. Note where each asset is located and the title holder (trustee vs. controlled company).

Banking/custody map: Which institutions, account numbers, relationship managers, KYC status, mandates, and signatories.

Tax profile: Settlor and key beneficiaries’ residency and domicile, US nexus, UK remittance status, Australian/Canadian/South African exposure. List any historic distributions and tax advice.

Reporting obligations: FATCA/CRS status, GIIN, HMRC Trust Registration Service, EU beneficial owner registers, local filings.

Existing advice library: Legal opinions, tax rulings, court approvals, regulator correspondence.

I advise an internal “feasibility memo” at this stage. Keep it to 5–7 pages summarizing powers, constraints, red flags, possible migration routes, and early tax issues. That document becomes the playbook for the team.

Choosing the right destination jurisdiction

Not all trust jurisdictions are interchangeable. When I help families shortlist, we score candidates across the following factors:

Legal framework and court quality: Stability, specialist trust judges, precedents, firewall statutes protecting against foreign claims, clarity on reserved powers/protectors.

Trustee ecosystem: Depth of licensed trustees, audit and compliance standards, bench strength for complex assets.

Banking friendliness: How global banks view the jurisdiction for KYC, onboarding, and cross‑border flows.

Cost and speed: Realistic timeline for court approvals (if needed), legal drafting, trustee acceptance, and overall fees.

Special structures: Need for VISTA (BVI) to ring‑fence trustee duties for underlying companies; STAR (Cayman) for purpose or mixed trusts; Guernsey/Jersey robust firewall and variations by consent; Singapore for Asia‑centric families and MAS‑regulated trustees.

Tax neutrality and reporting: No local taxes on trust income/gains, predictable CRS classification, and no aggressive local substance requirements for passive trusts.

Examples:

Moving an operating company trust with significant founder control often points to BVI VISTA or Cayman STAR.

For European asset bases, Jersey and Guernsey provide court oversight and widely respected trustees.

For Asia‑centric families with strong banking in Singapore or Hong Kong, Singapore trusts offer high‑quality regulation and a deep private banking network.

Build the advisory team early

A strong team avoids rework and delays:

Lead trust counsel in the receiving jurisdiction.

Onshore tax advisers for settlor and major beneficiaries (e.g., UK, US, AU, CA).

Existing trustee and proposed new trustee (with senior decision makers).

Corporate counsel for underlying entities and asset‑specific lawyers (real estate, IP, fund interests).

Banker(s) and custodian(s) to plan re‑papering.

Valuation and accounting support if gains, stamp duties, or transfer taxes are in play.

If minors or conflicting beneficiary interests exist, independent counsel or a court blessing might be prudent.

Appoint one project manager—often receiving counsel or a family office lead—to drive deadlines, coordinate documents, and own the checklist.

The migration paths: choose continuity over complexity

Broadly, you’ll pick from four routes:

Change governing law only: Cleanest if the trust deed permits, the trustee remains acceptable, and banks are content. The trust continues; only the law and forum change.

Change trustee and governing law: Most common. Execute a deed of retirement and appointment, with a parallel deed changing governing law. Receiving trustee performs full due diligence.

Migration/continuation (if available): Some jurisdictions allow the trust itself to “continue” under their law, preserving identity. This can cut paperwork but still requires deep diligence.

Decant or resettle: Move assets into a newly settled trust mirroring the old terms. Useful when the old deed is inflexible or lacks powers to change. Check for tax realization, stamp duties, and “resettlement” risk.

My bias: preserve continuity whenever possible. Courts and tax authorities care less when they see a continuation backed by clear deed powers and documented intent to maintain the same beneficial interests.

Step‑by‑step migration plan

1) Diagnose feasibility against the deed

Confirm the clause permitting change of governing law and forum.

Identify who must consent: trustee, protector, appointor, enforcer, or beneficiaries.

Check perpetuity period and purpose clauses—some destinations require modifications.

Note reserved powers. Excessive settlor control can change tax outcomes post‑migration.

Tip: If the power to change governing law is missing, explore a court application or a two‑step approach (decant into a new trust).

2) Map tax exposures early

Profile settlor and beneficiaries’ residencies for the last 10 years and foreseeable future.

Flag US persons (citizens or green card holders), UK deemed domiciled individuals, Australian residents, Canadians, and South Africans—each with unique anti‑avoidance regimes.

Ask: Will the move change trust residence under any onshore rules? Could it trigger a resettlement recognized for tax? Will any assets be deemed disposed of?

Get preliminary opinions so your drafting and sequencing avoid tax pitfalls.

3) Shortlist destination jurisdictions and trustees

Prepare a scorecard comparing 2–3 candidates on law, costs, timing, banking, and special structures.

Approach two trustees under NDA for soft acceptance and fee proposals.

Get comfort on onboarding times with intended banks and custodians.

4) Assemble the document pack for due diligence

Certified trust deed and all variations.

KYC for settlor, protector, key beneficiaries, and controllers of underlying companies.

Asset registers and financial statements.

Source of wealth/funds narrative and supporting evidence.

Historic tax advice where relevant to the trustee’s risk assessment.

Expect receiving trustee onboarding to take 2–8 weeks, depending on complexity and KYC readiness.

5) Decide the legal mechanics

Path A: Deed of change of governing law and forum; trustee remains, or a concurrent trustee change.

Path B: Deed of retirement and appointment with continuity provisions; supplemental deed restating terms to align with new law.

Path C: Court‑blessed variation or blessing, especially if powers are ambiguous or beneficiaries’ interests diverge.

Path D: Decant into a new trust (last resort if the deed is rigid or historic issues warrant a reset).

I often use a “restatement” deed in the destination to harmonize the trust instrument with local law without changing beneficial interests.

6) Draft migration documents

Common documents include:

Deed of change of governing law and jurisdiction.

Deed of retirement and appointment of trustee.

Supplemental deed or restated trust deed aligning with destination law.

Protector/appointor changes, if relevant.

Resolutions of underlying companies acknowledging the trustee change.

Legal opinions (old and new counsel) on continuity and non‑resettlement.

Notices to beneficiaries where required or prudent.

7) Address asset‑level transfers and consents

Bank and broker consents to change trustee; account documentation updates.

Property title transfers or trustee name changes; local notaries and stamps.

Fund manager and partnership consents (subscription documents may require GP approval).

Loan novations and security re‑documentation.

Intellectual property assignments or license updates.

Insurance policy owner/beneficiary changes.

Crypto custody and access protocols, updated signers, and key management.

Plan critical path items around third‑party consents. They often drive your timeline more than the legal drafting.

8) Plan regulatory and reporting updates

FATCA/CRS classification, GIIN, and sponsor updates if using a sponsoring entity.

HMRC Trust Registration Service (if relevant) updates within deadlines.

Local registers of beneficial ownership where applicable for underlying companies.

Notify tax authorities if prior rulings or agreements require it.

Update information sharing with banks to avoid reporting mismatches.

9) Execute and close

Arrange signing logistics: notaries, apostilles, legalized copies for counterparties.

Trustee minutes documenting rationale, due care, and confirmations of continuity.

Protector and other consents attached to the deed package.

Court approvals where used; retain sealed orders.

Comprehensive closing binder in digital vaults for all advisers and trustees.

10) Post‑migration tasks (first 90 days)

Re‑issue trust schedules and updated beneficiary registers.

Update internal compliance manuals, distribution policies, and investment authority letters.

Confirm first CRS/FATCA cycle will reflect the new trustee and jurisdiction.

Test banking functionality and daily operations; resolve any lingering KYC inquiries.

Hold a family briefing to explain what changed and what didn’t.

Asset‑specific nuances you can’t ignore

Real estate: Some countries treat a change of trustee as a transfer triggering stamp duty or land tax. Explore nominee arrangements or corporate holding to avoid retitling. Work with local conveyancers.

Operating companies: If you use VISTA (BVI) or equivalent, the trust can minimize trustee interference with management. Review board compositions, shareholder agreements, and reserved powers to avoid shadow control.

Fund interests and LPs: Many funds require GP consent for a change in the registered holder. Expect 2–6 weeks for admin changes.

Listed securities: Simple repapering, but check whether the custodian requires medallion guarantees or similar formalities.

Insurance: Private placement life insurance policies require carrier approval to change owner/trustee; review tax implications for policyholder changes.

Loans and security: Novations may trigger withholding tax or re‑registration fees. Align the effective date with interest periods.

Intellectual property: Record assignments with IP offices to preserve priority and enforcement rights.

Art and collectibles: Confirm export/import restrictions, freeport arrangements, and insurance endorsements.

Digital assets: Update custody, multisig arrangements, and incident response plans. Document key handling under trustee control.

Tax and reporting: country‑by‑country pressure points

I’m not giving legal advice here, but these are recurring hotspots that deserve early attention and tailored opinions:

United Kingdom:

UK resident or deemed domiciled settlors can face immediate attribution of trust income/gains. Migration doesn’t fix this unless the structure and connections change.

Beneficiary charges include matching rules and the “benefit” regime for close family.

Changing governing law doesn’t change UK tax residence; trustee residence and central management/control matter. Watch UK resident professional trustees or UK‑based protectors with strong powers.

United States:

Identify grantor vs. non‑grantor status. For grantor trusts with US grantors, income is taxed to them regardless of migration.

For US beneficiaries of non‑grantor trusts, accumulation distributions can trigger throwback tax and interest charges. Document “DNI/UNI” and trust accounting income rigorously.

PFIC holdings in underlying companies are a common pain point; consider QEF/MTM elections at the beneficiary or corporate level where feasible.

US filing maze: Forms 3520/3520‑A, 8938, FBAR, 8621 (PFIC), 8858/8865 for entities. Migration can change which entity reports what; get a US CPA versed in trusts.

Australia:

Section 99B can tax distributions of accumulated foreign income to Australian residents.

Section 97 attribution and “present entitlement” concepts can pull income into personal assessments if improperly structured.

“Resettlement” risk is taken seriously; a material change may be treated as a new trust with CGT consequences.

Canada:

Section 94 can deem a trust resident in Canada in certain circumstances. A Canadian resident contributor or beneficiary with influence raises risk.

The “21‑year rule” causes deemed disposition. Migration doesn’t reset the clock; plan for it.

South Africa:

Sections 7C, 7D, and 25B rules interact with loans to trusts and distributions to SA residents.

Exchange control approval may be needed for certain transactions.

EU/EEA trends:

Transparency, registers of beneficial owners (with evolving public access), and mandatory disclosure regimes (DAC6) can affect planning optics and reporting.

ATAD measures can touch holding companies under the trust; ensure substance for entities where needed.

A good rule: assume tax authorities examine purpose, continuity, and benefits. Keep your minutes and legal opinions tight and contemporaneous.

Banking and compliance: smooth the hardest part

No matter how elegant the legal solution, banks will test your patience. A few tactics that help:

Pre‑clear with relationship managers. Share anonymized structure charts and the receiving trustee’s credentials to avoid last‑minute surprises.

Prepare a robust source‑of‑wealth pack for the settlor and major contributors with transaction trails, sale agreements, audited statements, and press references.

Align effective dates with quarter‑ends or distribution cycles to avoid interest mismatches.

Expect enhanced due diligence if the trust has a complex history, PEP connections, or litigation.

CRS/FATCA classifications: Work with the trustee to ensure consistent definitions across banks and the trust’s own filings.

Most onboarding delays come from missing KYC evidence or unclear transaction histories. A short, well‑written narrative with exhibits beats a pile of unsorted PDFs.

Governance upgrades to consider during migration

Treat migration as a chance to modernize:

Investment governance: Adopt a written investment policy, define delegation to managers, and clarify risk limits. Consider appointing an investment committee.

Distribution protocol: Establish criteria, documentation requirements, and a calendar for reviews. Keep contemporaneous rationale.

Protector and reserved powers: Tighten scopes to avoid tax issues while preserving meaningful family oversight. Many families move from broad veto powers to targeted consent rights.

Succession planning: Update perpetuity periods (where allowed), appoint successor protectors, and refresh letters of wishes with clear priorities and family values.

Philanthropy: Add a charitable sub‑trust or purpose trust if the family’s giving is increasing.

Timelines, costs, and budgeting

Every structure is different, but these ballpark ranges help set expectations:

Timeline:

Diligence and feasibility: 2–4 weeks.

Trustee onboarding and document drafting: 4–8 weeks.

Banking and third‑party consents: 4–12 weeks (often the critical path).

Court involvement (if needed): add 4–12 weeks depending on jurisdiction.

A straightforward migration can wrap in 8–12 weeks. Complex cases stretch to 4–6 months.

Costs (USD or equivalent):

Legal (receiving jurisdiction): $25k–$90k depending on complexity.

Existing counsel and opinions: $10k–$40k.

Trustee acceptance and onboarding: $5k–$25k (plus annual fees $10k–$50k+).

Corporate/asset transfers and local counsel: $5k–$50k.

Court applications: $10k–$60k.

Banking re‑papering: usually bundled but expect some administrative charges.

Budget 0.10%–0.50% of asset value for the project on average, with outliers for heavy real estate or litigation‑sensitive situations.

Practical case studies

Case 1: Operating company trust moves from BVI to Jersey

A founder had a BVI discretionary trust holding a 100% stake in a regional manufacturing group. Banks were tightening exposure to BVI, and the family wanted more court oversight and a Europe‑friendly jurisdiction. The trust deed permitted a change of law and trustee with protector consent.

Path chosen: Change trustee and governing law to Jersey, restate the deed to align with Jersey law, keep the holding company in BVI under VISTA to preserve management autonomy.

Key hurdles: GP consents for a private equity co‑investment, and bank KYC refresh for USD syndicate facilities.

Outcome: Migration completed in 14 weeks. Banking relationship improved, and the trustee had a clearer governance framework with an investment committee.

Lesson: Mixed solutions work—don’t move what you don’t need to. Keeping the BVI company under VISTA delivered operating flexibility while the trust gained Jersey stability.

Case 2: Family trust with US beneficiaries moves to Cayman STAR

A non‑US settlor with children studying in the US held funds and two operating subsidiaries. The trust had mixed purposes (family benefits and a long‑term educational grant program). US advisers flagged throwback tax risks for accumulated income sent to US beneficiaries.

Path chosen: Move to a Cayman STAR trust with a carefully drafted distribution mechanism and a US‑facing reporting protocol. Appoint a US tax preparer to track DNI/UNI and PFIC exposure.

Key hurdles: Aligning protector powers to avoid inadvertently creating a US grantor trust. Updating fund elections for PFICs at the company level.

Outcome: Improved governance with purpose oversight through an enforcer, fewer US tax surprises due to better accounting, and smoother interactions with US‑based banks.

Lesson: Structure choice matters. STAR gave flexibility, but the drafting around US tax footprints made the real difference.

Case 3: Multi‑jurisdictional family re‑centers in Singapore

A family with beneficiaries across Hong Kong, Australia, and the UK struggled with conflicting legal advice and inconsistent bank reporting. The trustee was in a smaller jurisdiction with limited manpower.

Path chosen: Change trustee to a MAS‑regulated Singapore provider, keep governing law aligned with Singapore, and rebuild banking relationships locally and in Switzerland.

Key hurdles: Australian beneficiaries drove the need for careful section 99B planning. Several LP interests required GP approval.

Outcome: A unified governance calendar, improved KYC standing with regional banks, and a clear distribution policy mindful of Australian and UK tax.

Lesson: The receiving trustee’s bench strength and regulatory regime can be as valuable as any tax nuance.

Common mistakes—and how to avoid them

Assuming power where none exists: Many deeds lack a clean power to change governing law. Fix with a court blessing or a decant—don’t wing it.

Triggering a resettlement: Over‑editing the deed or changing beneficial interests can create a new trust in the eyes of tax authorities. Use restatements carefully and log continuity intent in minutes and opinions.

Neglecting asset‑level taxes: Property and transfer taxes can dwarf legal fees. Get local advice on title changes and stamp duty.

Ignoring US/UK/AU beneficiary implications: Beneficiaries drive tax outcomes. Tailor distribution policies and reporting, or you’ll inherit their tax mess.

Banking naivety: Assuming banks will simply “flip a switch” after a trustee change is optimistic. Pre‑clear, pre‑paper, and keep timelines realistic.

Over‑broad protector powers: Excessive control can re‑characterize tax residence or create grantor status. Use narrow, well‑defined consent rights.

Poor documentation: If a regulator or auditor can’t see continuity and rationale, you didn’t really migrate—at least not in a way that stands up under scrutiny.

Leaving beneficiaries in the dark: Surprises breed conflict. A measured communication plan helps preserve trust and avoids litigation.

Checklists you can use

Pre‑migration checklist

Trust deed, all variations, letters of wishes.

Powers to change governing law/trustee verified.

Protector and required consents identified.

Full party KYC and source‑of‑wealth evidence assembled.

Asset inventory with situs and consents needed.

Onshore tax profiles mapped; US/UK/AU/CA/ZA exposure flagged.

CRS/FATCA status and registrations reviewed.

Destination shortlist prepared; trustee proposals received.

Initial tax and legal feasibility memo drafted.

Execution‑phase checklist

Draft deeds: change of law, retirement/appointment, restatement.

Protector/appointor consents secured.

Underlying company resolutions prepared.

Asset transfer/consent documents ready.

Banking re‑papering and account mandates in process.

Legal opinions on continuity and tax secured.

Court filings (if any) scheduled and heard.

Signing logistics, notary, apostille organized.

Minute the rationale and decisions contemporaneously.

Post‑migration (30–90 days)

Update CRS/FATCA registrations and GIIN if needed.

Notify relevant tax authorities or registers (e.g., TRS).

Confirm bank reporting alignment and account functionality.

Issue updated trust schedules and beneficiary registers.

Review investment and distribution policies under new law.

Hold family and adviser briefings; circulate the closing binder.

Final thoughts

Migration isn’t just a legal transfer; it’s a chance to reset how the trust serves the family. The best outcomes come from early diagnostics, disciplined sequencing, and respect for tax and banking realities. Focus on continuity, document intent, and keep governance tight. If you build the right team and follow a clear roadmap, moving a trust can unlock better protection, cleaner operations, and fewer headaches for the next generation.