Trusts have been used by wealthy individuals for centuries as a way for them to structure their estate and succession planning.
The use of Trusts in international business has developed rapidly in recent years. Trusts have become an instrument of choice for many individuals, and increasingly corporations, who wish to take advantage of the many benefits offered by this creation of Anglo-saxon law, including
- tax mitigation
- asset protection
- succession planning and
- ease of transfer of assets.
Trusts created by a non-resident of Gibraltar for non-resident beneficiaries are exempt from all taxes in Gibraltar. They need not be registered and thus are confidential and private arrangements.
Trusts may be used for the general protection of assets in a variety of circumstances. Clients consider using a trust to deal principally with family issues but also in circumstances where there is a political, economic or social threat to their assets.
In an inter vivos trust, there is no change of ownership of assets when the settlor dies as these are already vested in the trustee and this may avoid the need for probate of a will, thereby ensuring smooth and easy succession of ownership or rights.
Trusts enable individuals to plan the succession of their assets with great flexibility and they may make ongoing changes to their plans. The individual may wish to preserve family wealth or to determine the manner in which family members will benefit from assets well beyond the time of his death.