Location of Offshore Trusts

For the purpose of wealth protection, privacy and asset management, international tax planning and wealth management practices frequently make use of trusts and private foundations. These can be located on-shore or offshore, and used correctly they provide tremendous benefits in terms of reducing the taxation that wealth attracts.

Differences in each clients personal circumstances, objectives, lifestyle choices and risk profile all need to be taken into consideration in planning the use of these vehicles, and choosing the tax jurisdiction in which they should be based. The experience, expertise, integrity and knowledge of the trustees is also of paramount importance, while a protector is also a good position to establish to ensure that the trustees act in a correct and proper manner.

Within trust vernacular, the one who establishes the trust or contributes the assets (also known as body or corpus) of the trust, is known as the grantor or settlor. Many off shore jurisdictions have very stringent regulations, giving peace of mind regards the safety of assets protected in such a way.

All jurisdictions are not created equal, and again here is an area where it pays to have expert advice. There are some locations which are very well regulated giving you the creator of a trust the peace of mind and financial security which you require.

There are many different aspect and benefits to the different jurisdictions which are beyond the scope of this article. However, countries such as Jersey, Austria, the Isle of Man, Lichtenstein and of course Monte Carlo are frequently chosen for the combination of tax friendliness and robust and reliable governmental and legal structures.

Belize and the British Virgin Islands operate some of the most friendly taxation regimes in the world, correctly managed trusts in these locations can provide some of the best outcomes. Operating trusts in these locations it is imperative to ensure that the trust is well structured – we ensure that your assets are totally protected under all circumstances.

A particular advantage of using offshore trust structures is that tax liabilities are only incurred when money is taken into the UK. Capital gains can frequently be realised tax free, and therefore the accumulation of capital funds can occur far more quickly than when tax is deducted annually irrespective of whether the funds are taken and utilised or not.

Should you be considering the purchase of a home abroad for example, it is often pointless to pay tax in the UK on money which ultimately will never be spent here.