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| Tax Planning Offshore Trusts |
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| Written by tolumi |
| Friday, 05 December 2008 15:47 |
Tax Planning Offshore TrustsTrusts are a useful tax and inheritance planning vehicle which have come in for a rocky ride of late. Following attacks by the UK on the offshore trust tax situation, Jersey is waiting on confirmation of how the trust market progresses. Tax Planning Offshore Trusts Jerdey CompaniesJersey companies provide a wide range of trusts from the typical discretionary trust to fixed interest, accumulation and maintenance, to employee benefit trusts, which are particularly popular on the island.A series of legal cases has highlighted potential problems in the system, which trust companies are hoping will soon be resolved in order to allow business to resume as normal. Jonathan Crowther at Cater Allen comments: “There are several issues flying around at the moment including the question of where a person is domiciled - the non-domiciled could find themselves getting whacked for tax - and of course the withholding tax issue.” Tax Planning Offshore Trusts & Nick Owen“We are just coming into an era of trust regulation,” says Nick Owen at Flemings Offshore. “The UK crown dependencies are very keen to establish some sort of standard - companies cannot risk the besmirching of Jersey’s reputation. One of the problems we have had is that investors often assume that trusts are already regulated, which causes headaches later on. Recently, however, there has been a consolidation of trust companies which can only help when we move towards regulating sometime next year.”At present, there are some 200 trust companies operating on the island but this is expected to rationalise as regulations are set in place, reducing the number to an anticipated, but still considerable, 150. Nick Owen, however, warns investors to deal with trustees that are above reproach - bank-owned trusts and those run by accounting and law firms are among those with the best reputations. Tax Planning Offshore Trusts & The Jersey Trust LawThe Jersey Trust Law approved in 1984 has often been used as a model for other offshore jurisdictions. In the recent Edwards Report, however, it came in for some criticism and the matter is yet to be resolved. The JFSC has rejected the criticism saying that it was made on a misunderstanding of the Jersey situation. Richard Pratt comments: “The Trust Law only governs how the trust should be set up. Next year, legislation will be brought in to regulate the trust companies themselves - putting Jersey ahead of other offshore centres.” |
| Last Updated on Monday, 29 December 2008 15:15 |
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