Q&As

To what extent will English law recognise and enforce in England a trust holding only foreign property, if both the trustee and beneficiary are resident in England?

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Published on LexisPSL on 13/07/2018

The following Wills & Probate Q&A provides comprehensive and up to date legal information covering:

  • To what extent will English law recognise and enforce in England a trust holding only foreign property, if both the trustee and beneficiary are resident in England?
  • Recognition of a trust of foreign-situs property
  • Enforcement of a trust of foreign-situs property
  • European rules on civil and commercial matters
  • Common law rules

To what extent will English law recognise and enforce in England a trust holding only foreign property, if both the trustee and beneficiary are resident in England?

The recognition and enforcement of transnational trusts is a very complex topic; the following is only an outline of the main points for consideration.

Recognition of a trust of foreign-situs property

An English court may recognise a trust where the trustee and beneficiary both live in the UK, but the trust property is situated outside the UK. This principle applies to both movable and immovable property, but is more limited in the latter case.

In order for the court to recognise the rights and obligations of the parties under the trust, it must first be satisfied that the trust exists. There are certain preliminary matters that need to be addressed before it can be said that a trust has come into existence: the capacity of the settlor to dispose of his property on trust, the vesting of the property in the trustee on trust and the validity of the formal instrument creating the trust.

The capacity of the settlor to create a trust will usually be determined by the personal law of the settlor. In many cases, the personal law is likely to be the law of the jurisdiction where the settlor is domiciled or habitually resident.

As far as the vesting of

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