Investors who set up a trust in the Isle of Man benefit from a favorable regulatory environment that combines both a welcoming business regime for investors and highly rated financial supervision policies.
The Isle of Man offers a wide range of investment vehicles, not only trusts but also funds and open-end investment companies. Our team of Isle of man company formation
agents can help you with detailed information about any of these legal forms.
Trusts in the Isle of Man
A trust in the Isle of Man will provide trustee services to investors, both for commercial and for personal purposes. Examples of uses for a typical trust include:
- wealth protection and preservation for families;
- succession planning both for businesses and individuals;
- asset protection;
- tax reduction;
- employee benefit schemes.
The types of trusts most commonly employed in the Island of man include the following, briefly described in the list below:
- discretionary trusts: this is a common type of trust used in the Isle of Man in which the trustees have full powers for deciding now to distribute the capital and decide the amount received by the beneficiaries; these powers are awarded through the trust deed.
- life interest trusts: one of more beneficiaries receive a pre-determined share for a specified period of time; the beneficiaries can have access to the capital after the death of the trustor.
- purpose trusts: these are for non-charitable purposes and must have at least two trustees; they can be used for asset financing, securitization or to hold shares in a private trust company.
- charitable trusts: can be used for various charitable purposes such as poverty relief, education, religious purposes or other purposes that would benefit the community;
- pension trusts and employee benefit trusts: these can be used either to house pension funds or to motivate employees.
A trust arrangement offers a high degree of flexibility for investors and also a convenient level of security. What’s more, the arrangements between the trustor and the trustee are confidential and are not included in public records. One of our Isle of Man company registration agents
can give you complete information about the available professional trustee.
Trustee services in the Island of Man
Investors who open a trust in the Isle of Man will offer their services through an Isle of Man based corporate trustee. The relationship between the trustor and the trustee is a fiduciary one, with the trustee having a number of duties, including exercising reasonable care, acting in the best interest of the trustor or to act fairly and impartially. The main duties of a trustee include the following:
- know and observe the terms of the trust (an exemption applies when this action is directed by a court);
- protect the trust property and separate it from their own assets or those included in other trusts;
- act in good faith and only for the purposes for which they were designated;
- provide information to the beneficiaries when they request so;
- follow certain investment criteria when making trust investments.
Trustees can be held accountable by the beneficiaries when a breach of the duty of care arises.
Trust companies are popular in the Isle of Man and they are incorporated for the sole purpose of offering trustee services. Using a private trust company can be an alternative to selecting the services offered by an institutional trustee. One of our Isle of Man company formation agents can give you more details about these companies.
A trust in the Isle of Man presents an important advantage: it is completely exempt from taxes such as the capital gains tax, the inheritance, gift or estate tax. A trustee can be a taxpayer and may need to file tax returns, especially when he is a resident of the Isle of Man. Likewise, trust beneficiaries can be liable for taxes if they are residents or of the income arises in the Isle of Man.
The Isle of Man has a reputation as an offshore and trust center located conveniently close to important markets in the European Union. The establishment and the administration of trusts can be performed with the help of our local specialists and we do recommend seeking specialized assistance according to the type of trust you intend to set up.
For more information on offshore company formation in the Isle of Man
, the process of opening trusts or funds and other investment advice, please do not hesitate to contact us