Trusts

Offshore trusts can provide significant tax savings. But they are not suitable for all: if your country of origin is outside the UK you may well be non-UK domiciled and an offshore trust will provide little value.

For non-UK domiciles purchasing UK property, an offshore trust can provide significant tax savings. If you purchase property in your own name, capital gains tax is likely to be payable when the property is sold, as well as inheritance tax upon death. If you hold the property via an offshore structure, both of these taxes can be effectively and legitimately mitigated. 

An offshore trust is a legal entity evidenced by a Trust Deed into which the ownership of assets can be transferred by the settlor. A trustee, who is the legal owner of the assets, manages the trust. The beneficiaries are the equitable owners (the settlor may be a beneficiary). 

The trustee must be a neutral party who does not hold assets for their own benefit. They must act only within the confines of the Trust Deed, administering the trust purely for the benefit of the beneficiaries. The trustee would normally be a trust company, with expertise in trust and tax law to ensure that the offshore structure is tax efficient but also within the realms of the law.

Offshore trusts are established in a lower tax jurisdiction such as Guernsey, Jersey, the British Virgin Islands or Gibraltar in order to reduce tax liabilities that would normally be payable under UK law.