Trusts can play a major role in financial and estate planning for individuals, families and companies, particularly in the protection of assets and mitigation of tax liabilities.
The BVI’s trust legislation is based on English Common Law, supplemented by the Trustee (Amendment) Acts of 1993 and 2003 (which provided a comprehensive revision and modernization of the Trustee Ordinance 1961) and the Virgin Islands Special Trusts Act, 2003 (“VISTA Trust”). A VISTA Trust creates a statutory trust whereby a Trustee does not have a fiduciary duty to interfere in the operations of the companies underlying the trust as he would have under a common law trust, and whereby the Settlor or Grantor of the trust can retain control over the underlying companies.
Uses of a Trust
- Severance of ownership without losing the benefits of ownership
- Protection of assets by transferring control of them to the trustees
- Minimisation or deferral of taxation
- Holding property for minors
- Ensuring that property passes in succession
- Confidential provision of benefits to persons after the Settlor’s death
The Advantages of BVI Trusts
- A VISTA Trust can be set up which is essentially a trust to retain shares of an underlying company versus the typical trust for sale.
- A protector can be appointed with the power to appoint or remove trustees and include or exclude beneficiaries. The proper law of the trust may be changed as is necessary by the trustees or the protector to protect trust assets.
- A Purpose Trust can be set up for any purpose which is specific, reasonable and neither contrary to public policy nor immoral.
- The 1993 law allows a perpetuity period of up to 100 years.
- Trustees have freedom to invest funds in any kind of investment in any jurisdiction.
- Persons of full age and sound mind, under the laws of their domicile, are deemed to have the capacity to transfer their personal property to a trust irrespective of succession rights under the laws of their domicile.
- Exemption of income tax and stamp duty for nonresident beneficiaries
- Confidentiality and privacy, since all trust deeds are exempted from registration cost
MWM Presentation Slide
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