Zetland, a Hong Kong-based financial consultancy, outlines the benefits of trusts in a comprehensive June report on its website.
The analysis describes the historical origins of trusts traced back to medieval times, when English nobles would entrust their worldly goods to friends and relations before crusading so their families would be provided for in the likely event of an untimely demise.
Laws relating to trusts have evolved over a period of several centuries, making it one of the most effective tax and estate planning techniques available, notes Zetland.
Simply stated, a trust is a relationship whereby a legal person (the trustee) holds property donated by a settlor (grantor in U.S.) for the benefit of third parties (the beneficiaries)
The use of an offshore trust can produce many substantial benefits. As always, proper professional advice needs to be taken in one's country of citizenship, residence and domicile before implementation.
An offshore trust may allow the reduction of liability to property, wealth or inheritance taxes in many countries and is a powerful tax planning tool for high net worth individuals. An offshore trust set up in a tax haven or low tax jurisdiction will suffer no local taxes on income or capital gains, thus maximizing the productivity of capital owned, notes Zetland.
An increasing purpose for using offshore trusts is to protect property from attachment by creditors. Certain professionals, such as medical practitioners, company directors, accountants and lawyers may be particularly vulnerable to unexpected and costly litigation. The consequences of divorce in many countries may also be severe.
By establishing a trust in an offshore jurisdiction, privacy is greatly enhanced. Most offshore jurisdictions have strong privacy protection legislation and few of them have tax treaties permitting the exchange of information between governments.
Zetland has trust licenses in a number of jurisdictions and provides corporate services such as company formation, bank account opening, nominees and managed company services.
Zetland Fiduciary Group Limited, based in Hong Kong, was established in 1987 and has offices in Seychelles, Singapore, Tokyo, Belize, Geneva, New Zealand and Shanghai.
