Trusts, particularly Offshore Trusts, have become an integral part of wealth and tax planning worldwide.
What started as an uncomplicated understanding between a wealthy land owner (the Settlor) a Trusted friend or relative (the Trustee) and the land owner's dependants (the Beneficiaries) has now become a refined planning tool administered by modern laws tailored to meet the needs of Settlors and Beneficiaries employing professional Trustees to protect their family or corporate wealth.
Why set up a Trust?
You should seriously consider the use of a Trust if you are concerned about the protection of your assets from financial, fiscal or political risk.
A Trust is one of the most secure and flexible financial planning vehicles available, particularly when established offshore.
A Trust may also be an effective tax-planning tool, for example in respect of estate or inheritance taxes on assets situated outside the country of the Settlor's nationality. It may also provide complete confidentiality and protect assets from the imposition of exchange controls or similar political measures. A Trust may also be used as a means of protecting assets from the risk of unforeseen financial difficulty.
All types of assets, from personal properties - such as the family home - to more complicated investments, may be included in a Trust structure and the use of Trusts is not confined to individuals. International corporations also use Trusts as an important part of their asset management strategy.
By establishing certain types of Trusts, individuals may remove assets from their estate, thus reducing their taxable wealth, limiting exposure to income tax, capital gains tax, wealth tax, gift tax and inheritance tax.
When using Trusts for tax purposes, Settlors must consider the tax rules that apply to themselves, the Beneficiaries and also the assets. Care must also be taken to consider the implications of transferring assets into the Trust and how payments to the Beneficiaries will ultimately be treated.
Having worked so hard to build a valuable business or asset base, it is everyone's right to try to preserve that wealth for themselves and their family.
To find out more about our Trusts and whether they would be appropriate for you, contact deVere China’s experts today.