Hague Trust Convention
Convention on the Law Applicable to Trusts and on their Recognition
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International convention governing the recognition of trusts in states without their own trust law; in force for Switzerland since 1 July 2007.
The convention determines which law applies to a trust and ensures that courts and authorities recognise foreign trusts. Switzerland has no trust law of its own.
In practice
In Switzerland, the convention ensures that foreign trusts are recognised as separate funds – for example in inheritance, matrimonial property and bankruptcy law. For family offices with trusts under English or Jersey law, this means that the trust deed, the letter of wishes and evidence on the trustees, protector and beneficiaries belong in the file in full. Germany and Austria have not acceded to the convention; there, trusts are treated under national law.
Distinctions and common mistakes
The convention governs recognition and the applicable law, not taxation; in Switzerland, taxation follows Circular No. 30 of the Swiss Tax Conference. A typical mistake is to assume that a recognised trust protects against compulsory shares under Swiss inheritance law.
Relevant in: Switzerland
Related terms
- Trust
- A legal relationship under common law in which a settlor transfers assets to a trustee, who manages them for the benefit of beneficiaries.
Mentioned in these guides
- Trust or foundation? A comparisonTrust or foundation for family wealth? Legal nature, control, recognition in Switzerland, Germany and Austria, tax and compliance compared side by side.
- The family foundation in Switzerland: purpose, limits, administrationWhat a Swiss family foundation may and may not do: permitted purposes under Art. 335 ZGB, maintenance foundations, register duty, reform status and taxation.
- Trusts in Switzerland: recognition, trustees, taxationHow Switzerland deals with trusts: Hague Trust Convention, FINMA licences for trustees, Form T, AEOI, taxation under Circular No. 30, the shelved Swiss trust.