To achieve higher levels of tax efficiency, the
shares of an offshore company can be owned by a trust. This can result in
very substantial tax and non-tax related advantages which will accrue both on
death and during the lifetime of the "settlor" of the trust, for instance:
ASSET PROTECTION: Trusts may be used to hold assets safely out of reach of
creditors in the unfortunate event of financial difficulties, divorce
proceedings or litigation.
INHERITANCE TAX SAVINGS: Once the assets are placed in a trust, they no
longer for part of your estate. This means that no the inheritance tax is
chargeable on the value of the real estate, shares and other assets or valuables
held by the trust.
AVOIDANCE OF PROBATE: For the same reason, a trust provides a medium whereby
assets are smoothly passed on to the next generation without the disruption,
delays, substantial costs, loss of confidentiality associated with probate
procedures necessary when assets are bequeathed by will.
CONTINUITY: Trusts provide for the continuation of a settlor's wishes after
his death. A trust can stipulate that assets should continue to be
administered in accordance with the settlor's instructions laid down in the
trust deed. For instance, weaker heirs can be protected from others and
the spendthrift can be protected from himself.
LIFETIME TAX SAVINGS: During lifetime, substantial income and capital gains
tax advantages may result from setting up the trust.