1 / FEBRUARY 2016 | Guernsey Insolvency Law Consultation BRITISH VIRGIN ISLANDS CAYMAN ISLANDS GUERNSEY JERSEY CAPE TOWN LONDON SINGAPORE CAREYOLSEN.COM FEBRUARY 2016 RESTRUCTURING & INSOLVENCY GUERNSEY INSOLVENCY LAW CONSULTATION 2 / FEBRUARY 2016 | Guernsey Insolvency Law Consultation INTRODUCTION On 11 February 2016, the Guernsey Commerce and Employment Department published a consultation response document to set out the proposals the Department is going to take forward for the reform of Guernsey’s personal and corporate insolvency laws (the Consultation Response).

A Carey Olsen regulatory team consisting of Guernsey partner Mark Dunster and associate Luke Sayer, have had a significant success for their client, a leading financial services business (the “Liquidator” or “Applicant”), by successfully making an application for the restoration of a Guernsey company – previously a property holding company (the “Company”) - pursuant to the Companies (Guernsey) Law, 2008, as amended (the “Companies Law”).

THE ISSUE

Late last year, the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48. The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale.

Yesterday the High Court handed down its decision in Commissioner of Taxation v Australian Building Systems Pty Ltd (in liq) [2015] HCA 48.  The High Court held (by a majority of 3:2) that, in the absence of an assessment, a liquidator is not required to retain funds from asset sale proceeds in order to meet a tax liability which could become payable as a result of a capital gain made on the sale.  In doing so, the majority of the High Court affirmed the decision of the Full Federal Court and provided long awaited guidance to liquidators, receivers and administrators.

INTRODUCTION

The Royal Court of Guernsey has taken the welcome step of dedicating specific court time to company and insolvency matters.

THE PRACTICE DIRECTION

In an important judgment published last week, the Royal Court of Jersey has provided guidance to trustees and other holders of fiduciary powers in relation to the exercise of powers when a trust is considered to be “insolvent”. Counsel in the case was unable to find any relevant authority on this subject in any other trusts jurisdiction, so this may well be one of the first cases to deal with this issue.

british virgin islands cayman islands guernsey jersey cape town london www.careyolsen.com 1 bvi litigation & insolvency client update - SEPTEMBER 2015 Dispute Resolution & Litigation | Restructuring & Insolvency British Virgin Islands Welcome to our September BVI litigation and insolvency bulletin, co-authored by Ben Mays, Andrew Chissick and Jevaughn Rhymer. This edition of the bulletin contains reports on four recent cases: • Privy Council authority concerning a contested, Court-run auction of a property arising in the liquidation of a well-known luxury Caribbean resort.

The Royal Court of Guernsey has issued a Practice Direction pertaining to the information required when applying for the appointment of an administrator or liquidator in Guernsey.

The Practice Direction

INTRODUCTION

The High Court has granted special leave to appeal the decision in Commissioner of Taxation v Australian Building Systems Pty Ltd(in liq) [2014] FCAFC 133 which held that a liquidator is not required to retain funds from the proceeds of sale of an asset to pay tax before an assessment is issued.

Practical Implications