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Potential Non-Dom Solutions: Trusts

Contributed by Fiduciary Group
02 February, 2017

Planning for the Upcoming Changes before the April 2017 Deadline

The UK government announced at the outset of these reforms that it intended there to be some protection for those individuals who had set up offshore trusts before they became deemed-domiciled. As such, offshore trusts that are set up by an individual who is not yet domiciled in the UK will remain outside the scope of UK IHT, even after that individual becomes deemed UK domiciled.

Why Establish a Trust?

The trust is a highly flexible instrument which can be tailored to meet a Settlor’s specific requirements and apart from confidentiality may provide the following advantages:

  • Protection and administration of assets for family and future generations.
  • No need for probate which simplifies the distribution of assets to family members.
  • Potential tax savings.
  • Mitigating inheritance taxes or estate duties which may otherwise be payable, as well as potentially protecting assets from forced heirship provisions whereby the Laws of a particular Country determine the inheritance of assets in a manner which may be contrary to the wishes of the Settlor.

What are the Advantages of a Gibraltar Trust?

  • Confidentiality both as to administration and distribution of assets.
  • While trustees are required to prepare accounts for trusts under administration, there is no requirements to file accounts.
  • There is no public register of trusts in Gibraltar (except asset protection trusts).
  • The assets of such a trust can be held in any currency. There are no exchange controls.

Taxation of Gibraltar Trusts

Trusts established for non-residents of Gibraltar do not pay any income tax in Gibraltar even where: the trustees are Gibraltar residents; the trust is fully managed from Gibraltar; or trust assets such as bank deposits are held in a Gibraltar bank.

Further Tax Advantages

  • There is no estate duty in Gibraltar.
  • No stamp duty is payable on the transfer of assets held by a trust except in the case of immovable property situate in Gibraltar.
  • No gift or wealth taxes are payable.
  • There are no capital gains taxes in Gibraltar.

If you have any questions regarding the information provided in this article, please do not hesitate to contact us at info@fiduciarygroup.com

Download our full guide on potential solutions for non-doms here.


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