UK resident settlor: working with a trustee in Switzerland

A UK resident settlor who uses a trustee in Switzerland is working across two systems at once. The trustee answers for the administration of the trust from Switzerland; you and your advisers answer for your own position at home. The relationship works when each side knows what it must give the other, how often, and through whom.

This page is about that practical interface: what the trustee needs from you, what you should expect to hear back, and where your UK adviser takes over. It does not assess UK law. Where a question turns on UK rules, it is flagged and sent to a UK adviser, with a list of what to ask.

How a UK resident settlor and a Swiss trustee divide the work

Think in three roles. You, as settlor, set the objectives, sign the trust deed and may keep certain reserved powers. Your UK adviser (a lawyer, tax adviser or both) looks after how the structure interacts with your personal circumstances in the United Kingdom. The Swiss trustee holds the assets, administers the trust under its governing law, keeps the records and reports.

Two points follow from that division:

• The trustee cannot answer UK questions for you. It can tell you what the trust holds, what decisions were taken and why, and it can supply documents your UK adviser asks for.
• Your UK adviser cannot administer the trust. They can tell you what to ask the trustee, and they can review what the trustee sends.

Problems tend to appear in the gap between the two, usually because nobody was named as the person responsible for passing information across.

What the trustee needs from you

A trustee in Switzerland has regulatory duties of its own, so its first requests can feel thorough. Expect to be asked for:

• proof of identity and of your residence in the United Kingdom, and an explanation of where the assets come from;
• the names and details of beneficiaries and, if there is one, the protector;
• the purpose of the trust and any wishes you want the trustee to bear in mind, often in a letter of wishes;
• the name of your UK adviser, and your consent for the trustee to speak to them directly;
• a description of any powers you want to keep, which the trustee will test against the trust deed.

The Hague Convention on trusts accepts that a settlor may keep powers without the arrangement ceasing to be a trust (Article 2). In practice, though, every reserved power is a conversation about who decides what, so it is better settled at the start than discovered in a disagreement.

What stays with your UK adviser

How the United Kingdom treats a settlor, a trust or a distribution is not something this page can state. The facts available here concern Swiss law and the Hague Convention, not UK law. Treat each of the following as a question for a UK adviser, not as an answer:

• whether and how the trust is recognised for UK purposes;
• how your residence, domicile or other status affects your own reporting;
• how transfers into the trust, income and distributions are treated for you and for UK resident beneficiaries;
• any registration or disclosure duty that falls on you or a UK adviser personally.

When you brief your adviser, give them the trust deed, the latest trustee report and the trustee's description of its own regulatory status, so that the advice rests on documents and not on a summary. Our guide on due diligence on your trustee lists what to check about the trustee itself.

Who talks to whom

The diagram shows the usual line of communication. Notice that the settlor sits in the middle: nothing moves between adviser and trustee without your written consent.

If you add a protector or an adviser to a family office, the same rule applies: one named contact per party, and a written record of who may speak for whom. The trustee, protector and beneficiary triangle explains how those roles interact.

A contact map for the first year

Example: a first-year calendar

Example: a settlor in Surrey, whom we will call Mr Hartley, funds a trust with a trustee in Geneva. He has a UK tax adviser and a solicitor. The names are invented and the sequence is an illustration, not a prescription.

Opening weeks. Mr Hartley completes the trustee's onboarding file. He signs the consent that lets the trustee speak to his UK adviser. The solicitor and the trustee's counsel agree who reviews the draft deed, and the appointment of the trustee is recorded.

Funding. Before assets move, the UK adviser confirms in writing that Mr Hartley has taken advice on the transfer. The trustee confirms what it has received and how it is held. A call between the three of them closes the file and records who owns each next step.

First reporting point. The trustee sends the first account and a short note on decisions taken. Mr Hartley forwards both to his adviser, who lists any question they want the trustee to answer.

Mid-year. A review call covers the investment approach, any request from beneficiaries and any change in Mr Hartley's own circumstances, such as a move or a change in his family.

Year end. The trustee runs its annual compliance review, covered in the yearly compliance review, and the UK adviser receives the documents they need for the settlor's own filings. Mr Hartley reviews his letter of wishes and decides whether it still reflects his intentions.

What the Swiss side does and does not settle

On the Swiss side the legal frame is clear. Switzerland signed the Hague Convention on the law applicable to trusts and on their recognition on 3 April 2007, ratified it on 26 April 2007, and it entered into force for Switzerland on 1 July 2007. The Federal Office of Justice confirms that foreign trusts have been recognised in Switzerland since that date.

Under Articles 6 and 7, a trust is governed by the law the settlor has chosen, expressly or by implication. Failing that, it is governed by the law with which it has the closest links, looking at the place of administration, the location of the assets, the trustee's residence and the purposes of the trust. If the chosen law does not know the trust, the choice has no effect and the closest-links test applies.

Recognition elsewhere is a separate matter. Article 13 allows a state not to recognise a trust whose significant elements connect essentially with states that do not have the institution of the trust. Article 15 leaves in place the mandatory rules of the forum, such as those on the protection of minors, the effects of marriage, succession rights and the protection of creditors. Whether and how these provisions apply to a trust used by a UK resident settlor is a question for a UK adviser. Ask them to state it in writing, with the reasoning.