This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.  
 

Introduction: What Future For The Trust?

Even the most devoted believer in the rights of humans to dispose of their own assets and to arrange their affairs to their own benefit would have to agree that the trust is an anachronism. But then so is offshore itself. The harmonisers would say that it is irrational and unacceptable to allow a person to separate himself artificially from his property for his personal gain. The tax authorities have dealt with the trust by ignoring it and bypassing it - the few that haven't yet done so will surely fall into line quite soon. So if the trust is not a barrier to a tax collector, why, logically, should it be a barrier to a creditor?

As much as the trust seems to be somehow unethical when used for personal enrichment or protection in defiance of the public interest, it is obviously the right instrument when used to hold assets on behalf of others. The 'Unit Trust', the pensions trustee and other quasi-public guardians of private interests are eminently acceptable, superior to the 'Code' equivalents, and would have had to be invented if they didn't already exist, as is amply proven by their wholesale adoption in 'Code' countries. A genuine generation-hopping anti-inheritance tax trust also seems OK, because this is a morally repugnant tax to many people.

So it's odd, isn't it, that the laws under which individuals gain protection against 'genuine' creditors through a 'fake' disposal of assets should if anything have become stronger, not weaker. This is an area in which the balkanised condition of international law (non-international law, in other words) shows no signs of the creeping globalisation affecting other walks of life. Banking, insurance, pensions, shipping, environment, accounting and a host of other bodies of law are converging. But not trust law, or the national court systems which cradle it. Why is this? Is it because lawyers are rich, too?

Logical or illogical, there is no sign that the trust has run its course, as our review of the main trust-friendly jurisdictions will show. Indeed, in 2006 the Swiss parliament approved the ratification of the Hague Convention on the Law applicable to Trusts and their Recognition.

Modifications to Swiss law to give effect to the Hague Convention concerned the Swiss International Private Law rules dealing with the recognition of foreign decisions and the jurisdiction of Swiss Courts in trust related matters, as well as the introduction into the solvency and bankruptcy law of the principle of segregation of trust assets.

Investec Trust Switzerland Managing Director Xavier Isaac stated at the time that the ratification had sent a clear signal to the international finance community that Switzerland recognised the importance of the Anglo-Saxon trust concept as an essential component of the wider wealth management proposition and of the need for an adequate legal framework when dealing with trust structures.

“It is a major development in the trust landscape internationally and for Switzerland,” he announced, continuing: “Ratification is great as it dissipates much of the uncertainty for trusts in the Swiss legal system.”

Mr Isaac added that high net worth individuals (HNWI) coming to Switzerland expect a secure environment for the structuring and management of their wealth.

“It is therefore the clients who will benefit most from ratification as more and more HNWI will continue to place their confidence in the Swiss financial sector, opening bank accounts and viewing trusts as sound vehicles for wealth management,” he observed.

“It will also give additional international credibility and standing to Switzerland as a proper jurisdiction for wealth management activities in a context where Switzerland is too often the target of some EU and other countries."

“Switzerland is adjusting its existing rules so that Swiss law can now interact with trusts from a legal perspective."

“The Swiss Tax Conference is reviewing the tax treatment on trusts. While the taxation of settlors and beneficiaries in Switzerland is the most complex and sensitive part of the discussion I hope that trusts, which have non-resident settlors and beneficiaries but have Swiss trustees and/or are being administrated in Switzerland, will be treated on tax neutral basis."

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Offshore Trusts News

Singapore Sees Record After Easing Compliance Burden Monday 24/4/2017 The Inland Revenue Authority of Singapore has hailed record tax compliance numbers for this year's tax season.

Aus Labor: Delay GST On Low-Value Imports Monday 24/4/2017 The Australian Labor Party has called on the Government to delay by one year the imposition of goods and services tax on low-value goods purchased from overseas sellers.

Shanghai FTZ Foreign Experts Get 'Green Card' Right Thursday 20/4/2017 The Shanghai Pilot Free Trade Zone can now recommend foreigner experts and their families for Chinese permanent residence "green card" permits.

Irish Accountants Respond To Consultation On Landlord Taxation Thursday 20/4/2017 A group of Irish accountancy associations has called on the Government to reduce the income and capital gains tax burden on landlords.

IMF Calls On Countries To Better Target Tax Relief Wednesday 19/4/2017 Governments should look to remove tax policies that distort business decisions, to unlock higher economic growth, a new paper from the International Monetary Fund says.

Canadian Governments Agree Internal Trade Deal Wednesday 19/4/2017 Canada's federal, provincial, and territorial governments have signed a new free trade agreement, which will reduce internal barriers to trade, investment, and worker mobility.

UK Supermarkets Benefited From Unpopular Business Rates Review Wednesday 19/4/2017 Large supermarkets will benefit from significantly lower tax bills under business rate revaluations that were introduced in April, figures show.

Irish Gov't Considering SME Tax Relief: Report Monday 17/4/2017 Ireland's Department of Jobs, Enterprise, and Innovation is to commission an assessment of the tax system, with a view to boosting the competitiveness of SMEs.

Rio Tinto Publishes Details Of Taxes Paid In 2016 Thursday 13/4/2017 Mining giant Rio Tinto has said that it paid USD4bn in taxes and royalties in 2016, with its total direct economic contribution amounting to USD35bn.

Schauble Favors Moderate Cut In German Tax Thursday 13/4/2017 German Finance Minister Wolfgang Schauble has informed taxpayers to expect moderate tax relief following this year's general election.