Why use an Offshore Trust

Tax Planning
A popular reason for establishing an offshore trust is tax planning. Trusts are often a useful way of mitigating income, capital gains and inheritance tax. While in some jurisdictions, such as the UK, the scope for tax planning through the use of a trust is severely limited, in other jurisdictions opportunities remain.

Preserving Personal Assets
A trust can hold real or personal property, cash, personal investments, etc. Persons settling in a region that is politically unstable or where there is a risk that a government will expropriate assets or impose exchange controls can protect their assets by placing them with trustees situated in a politically stable jurisdiction.

Estate Planning
Trusts can achieve many of the things a will can, and probably more effectively for complex arrangements. Problems of probate and inheritance laws in the settlor's country of domicile may be avoided. The transfer of ownership of assets to professional trustees with defined objectives as to how and for whose benefit the assets are to be held and administered will give confidence to the settlor.

Holding Shares in Offshore Companies
A trust can own the shares in an offshore company. The trustees will be bound to follow the settlor's wishes in dealing with the shares. A trust is a suitable mechanism to overcome problems associated with owning shares in offshore companies.

Protection from Potential Creditors
A trust is a means of protecting assets. Trust property is no longer in the legal ownership of the settlor, consequently future claims of creditors against the property can be denied. Certain jurisdictions, e.g. the Cook Islands and Nevis have enacted specific legislation to protect the private assets held on trust from potential creditors. Trusts created specifically to avoid creditors may well be set aside as being fraudulent.

Flexibility
The future is often uncertain and plans made today can quickly become out of date. A trust can be drafted to permit the trust to be adapted as times change.

Protecting the Weak
Trusts are frequently used to protect persons who are below the age of majority, suffer from mental and other disabilities or persons who are considered too immature to manage property in their own name.

Confidentiality
It may be desirable to conceal ownership of property through the use of a trust. As legal owner of the trust assets the trustees will be recorded on any documents of title. The trust deed itself is not a public document and therefore the details of beneficial interests are not in the public domain.