A story in Wednesday's Business section incorrectly identified Mr. Charles Gunn as deputy manager of the Bank of Bermuda. Mr. Gunn is deputy manager of the Bank of N.T. Butterfield & Son Ltd.

Government is to amend the Stamp Duties Act 1976 to prevent a current tax advantage which foreign-owned trust companies have over their local rivals.

At the moment, foreign-owned trust companies, which were only allowed into Bermuda 15 months ago, are exempt from taxes on the assets of their trusts.

But, under the Stamp Duties Act, local trust firms must pay a one-off fee of $250 and one-tenth of one percent of a trust's assets to a maximum of $4,000.

As soon as the anomaly was pointed out to Bermuda's Ministry of Finance, Government decided to amend the law.

Mr. Charles Gunn, deputy general manager/trust at the Bank of Bermuda, said: "This is very good news because it's something that was brought to Government's attention by the banks when the Trust Companies Act was introduced in September, 1991.

"This amendment will make Bermuda itself much more competitive with other jurisdictions.'' The amendment will only apply to foreign-owned trusts administered by local companies.

They will still have to pay stamp duty on local trusts, which locally based foreign trust companies are not allowed to handle.

Mr. Gunn said: "Most of our competitors don't have a stamp duty on settlement of trusts by non-residents of their particular jurisdiction. This amendment will bring us into line with them.'' Government agreed to the amendment right away, he said.

"It was brought to the Finance Ministry's attention and they said `yes, we have a problem here' and they set about correcting it.

"I think it's a very important change because it will benefit local trust companies and Bermuda in the long run.

"If someone wishing to set up a trust has two choices -- one where you pay tax and another where you don't -- it's obvious which one they will opt for.'' Mr. Peter Hardy, assistant financial secretary, said: "It was pointed out to us that there was not a level playing field as far as trusts were concerned.

"Government has recognised that and will be amending the Stamp Duties Act accordingly in the near future.'' At the moment, only one foreign-owned trust company, Swiss-based Lombard Odier, has been successful in winning one of the 21 trust company licences issued under Bermuda's new trust company legislation.

Lombard Odier International Trust Company expects to become fully operational early next year.

Schroders, the British merchant and investment banking group, is set to become Bermuda's second international trust company.

The group is in the process of buying out the Bank of Bermuda's 60 percent stake in Schroder International Trust Company Ltd. -- a 12-year-old joint venture in which Schroder owns a 40 percent stake.