What is a Trust?
- A legal relationship between a Settlor (who transfers property), Trustees (who own and administer the property) and Beneficiaries (who have an entitlement to the property)
- The Trustees must hold the trust property for the benefit of the Beneficiaries, in strict accordance with the terms of the
- Trust instrument (e.g. Trust Deed).The Trustees themselves cannot benefit
- Trusts in the Isle of Man are governed by various Trust Acts and also court case precedents
Why use an Isle of Man Trust?
The principal reason for using an offshore / Isle of Man Trust is to protect assets and wealth from claims and restrictions that may arise in certain countries, which include:
- Political risk
- Succession / inheritance claims
- Spendthrift children
Isle of Man Trusts are often used by wealthy Russian & Eastern European citizens for the following reasons:
- Avoidance of political instability in home countries
- Access to hard currencies, e.g. GBP, USD, EURO
- Avoidance of exchange controls
- Avoidance of forced heirship legislation
- Use of regulated, reputable jurisdictions
- Oversight by independent, effective courts
- Ability to hold a multitude of asset classes, eg life assurance products, bank accounts, investment portfolios, real estate, alternative investments
Why the Isle of Man?
- Politically stable, with the world’s oldest continuous parliament (over 1,000 years)
- Independent country, although the UK is responsible for the island’s good governance
- Financially stable, rated highly by Standard & Poor’s etc.
- No income, capital or inheritance taxes on trusts or corporate entities
- Well-established legal system, based on English common law
- Efficient, impartial courts, with ultimate appeal to the Privy Council in London. This makes it easy for Trust beneficiaries to take action against Trustees, where required
- Well-regulated financial sector; Trustees are regulated