Offshore trusts have many perceived benefits, including the ability to:
- Protect business assets or personal wealth from excessive taxation
- Create an international tax plan for expatriates or those individuals or businesses with international interests utilise the tax friendly offshore nature of the trust
- Depending on an individual’s circumstances, it is possible to save tax with an offshore trust by using such a structure in your estate planning
Another benefit would be if you’re considering becoming an expatriate and moving to a country other than one where no taxation is levied (!) you could place your significant assets into an offshore trust structure before relocating. The trust will be placed in a low or no tax jurisdiction as it is ‘offshore’, and even if you then move to a high tax jurisdiction, you could potentially protect gains and income from the trust from taxation in this way.
Another benefit of an offshore trust can be achieved when assets with long-term growth potential are placed in such a structure and any financial gain achieved can be realised without the payment of any gains taxation.
That said, laws in this area are very complicated and being tightened up all the time and it is very difficult to remove an estate’s entire liability.
Seeking specialist advice in this field is crucial as once assets are placed into trust, they are placed outside of your direct control and you are no longer the legal owner of what you once held. If you have any on-going say over what can be done with your assets, it will be minimal and your legal rights over the management of your assets will be strictly curtailed.
To find out about the different types of trust and discuss this further please email us.