Gibraltar Trusts
The concept of the Trust in Gibraltar is based on that developed in England with certain statutory differences. Gibraltar trusts are completely private and their existence does not have to be registered with any public authority. Generally shares in underlying companies are registered in the trustees names without evidence that they are held in trust.
Providing the trust deed specifically excludes Gibraltarians and residents of Gibraltar (other than category 2 individuals) from benefiting, and income arises outside of Gibraltar, the trustees will not be assessed to income tax, estate duty and stamp duty.
What is a Trust?
A Trust is a legal entity, which was devised under Common Law. The parties to the Trust are:
- The Settlor - the person who initiates the Trust by gifting into the Trust a sum of money or other assets;
- The Trustees - the legal owners and administrators of the Trust assets;
- The Beneficiaries - the persons who will benefit from the Trust;
The terms of the Trust are set out in a legal document (Trust Deed) which will define the trustees duties and responsibilities, and record the parties to the Trust at inception.
There are ample benefits to the establishment of a Trust and the following include a range of benefits:
- Asset protection;
- Enhanced confidentiality;
- Tax planning;
- Avoiding the unnecessary expense and delay of probate;
- Estate planning especially in countries with forced heirship rules;
- Protection for those unable to look after their own affairs (e.g. infants, the aged, the spendthrift etc);
- Preservation of family assets;
- Contingency planning;
- Major corporations can use Trusts for employee benefit plans, retirement and stock option schemes, insurance plans and pensions schemes among other financing arrangements.
A Fixed Interest Trust
This type of Trust defines the beneficiaries and their entitlement from the Trust, which may be the right to income during lifetime or until some predetermined event.
A Discretionary Trust
This type of Trust empowers the trustees to pay income and appoint capital to beneficiaries at their discretion. However, it is customary for the settlor to address a letter of wishes to the trustees outlining his desires with regard to the accumulation and appointment of income and capital. A trust company acting as a trustee will normally take account of such wishes, although the letter has no binding power in law. It therefore must be remembered that a Trust is not merely a legal document but a relationship whereby an individual divests assets to people he can trust to administer them as he would like.
Trustee Services
It will be apparent that the choice of trustee is most important, for both the Settlor and the beneficiaries. The Settlor is after all transferring the ownership of his assets to the Trustees who will become the registered owners of those assets and they will be responsible for the administration of both capital and income. Very often these matters will be at the sole discretion of the Trustees or as the Trust Deed may direct.
Whilst there are legal remedies available if a Trustee abuses his powers, or acts outside his authority, no client will be happy unless he has total trust and confidence in his appointed Trustees. In these circumstances an ideal Trustee will be a professional person, Trust Company or Bank which are staffed by professionals who will not risk losing either their reputation, livelihood or both.
ECS International Trustees (Gibraltar) Ltd has been established since 1982 with a background of professional staff with both an accountancy and legal background. ECS International has established an enviable reputation in this area of professional service and is responsible for the affairs of many trusts, which control many types of assets for the beneficiaries under those Trusts.
Furthermore, all trust service providers in Gibraltar are regulated and licensed by the Financial Services Commission, a regulatory body that applies the highest standards in international compliance.
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