TRUSTS & FOUNDATIONS

At Horizon, we provide unparalleled access to a global network of over 5,000 experienced professionals, operating from 85 offices across 45 jurisdictions. With years of expertise in forming and managing trusts and foundations, our team ensures your wealth is structured, preserved, and protected for future generations. Our comprehensive services include ongoing support and maintenance, tailored to meet the unique needs of each client, ensuring peace of mind and financial security.

TRUSTS

BRITISH VIRGIN ISLANDS TRUSTS

CYPRUS TRUSTS

JERSEY TRUSTS

UK TRUSTS

FOUNDATIONS

JERSEY FOUNDATIONS

SEYCHELLES FOUNDATIONS

JERSEY FOUNDATIONS

A Jersey foundation has some of the characteristics of both a company and a trust, which is attractive to those who are more familiar with a civil law jurisdiction. There are 4 main reasons to choose a Jersey Foundation outlined below.

PLANNING VEHICLES

The foundation is a flexible alternative to the traditional common law trust for tax and succession planning. It is particularly more appealing to those from civil law jurisdictions which have forced heirship provisions in their succession legislation.

CHARITY AND PHILANTHROPY

Foundations may be incorporated and used for charitable or philanthropic purposes. As such they need not have beneficiaries, but instead a beneficial purpose.

HOLDING ASSETS

To hold assets “off balance sheet”, to function as a succession planning vehicle. By placing assets in a foundation, founders can avoid the succession rules of their home state and can plan for the seamless devolution of family wealth in a tax neutral environment.

OWNING PRIVATE TRUST COMPANIES

Private trust companies may need to ensure that they have a neutral tax status for the purpose of acting as trustee of a trust receiving income/ gains. This can be achieved by a foundation owning the shares in the private trust company, which effectively “orphans” the private trust company.

SEYCHELLES FOUNDATION

HORIZON ASSOCIATES LIMITED’S AGENT FOR SEYCHELLES FOUNDATIONS ARE LICENSED AND REGULATED BY THE SEYCHELLES FINANCIAL SERVICES COMMISSION.

It is particularly interesting for private clients resident in jurisdictions where the concept of the Anglo-Saxon trust is unknown. Foundations are bodies corporate – in effect companies without shareholders. A foundation focuses on the needs of the founder. The beneficiaries of the foundation lack the rights or protection of beneficiaries of trusts – unless the founder wishes to provide otherwise. The regulations of the foundation are contractual, unlike the equitable obligations which underlie the trust.

Holding Assets

Seychelles Foundations can be used to hold assets “off balance sheet”.

Owning Private Trust Companies

Seychelles Foundations can be used to hold shares in companies to protect specific individuals from disclosure as “ultimate controlling parties” under IFRS.

Tax Planning

Seychelles Foundations can be used to function as a succession planning vehicle.

Holding Shares

Seychelles Foundations can be used to hold shares in companies to protect specific individuals from disclosure as “ultimate controlling parties” under IFRS.

BRITISH VIRGIN ISLANDS TRUSTS

The VISTA trust – a trust created and subject to the Virgin Islands Special Trusts Act 2003 as amended – is a modern form of trust for holding shares in companies where it is intended that:

a) the shares will be held indefinitely; and
b) the trustee is not intended, other than in special and defined circumstances, to intervene in the conduct of the affairs of the underlying company or companies.

Normally, a trustee must act as a “prudent investor” in respect of shares it holds in a company. This will require the trustee to monitor the company’s management and performance. It may also require the trustee to sell the shares to maximise the financial advantage of the trust assets or diversify risk. These trustee duties can easily conflict with the interests of ‘family’ trading and investment companies.

VISTA removes these conflicts and problems by enabling clients to create VISTA trusts under whose terms the trustees have no duties to interfere in the management of the company or realise the latent value of the shares.

SUMMARY OF VISTA’S MAIN PROVISIONS

The shares of a company held by a VISTA trust may be held indefinitely.

The directors or other parties of the underlying company can manage the affairs of the company without interference from the trustee.

The application of VISTA is to shares in BVI companies only.

Shares held subject to VISTA are held on trust to retain the shares.

Notwithstanding the trust to retain, the trustee is given power (subject to the precise terms of the trust) to dispose of the shares with the consent of the directors, or the settlor, or any other person nominated in the trust instrument.

The trustee is expressly prohibited from exercising its voting power or other powers attaching to the shares so as to interfere in the management of the company or the conduct of the business. Exceptionally, if an “interested person” e.g. a beneficiary, calls upon the VISTA trustee to intervene in the company’s affairs then the trustee must do so if the interested person has a “permitted ground of complaint” which must be specified in the trust instrument.

Exceptionally, if an “interested person” e.g. a beneficiary, calls upon the VISTA trustee to intervene in the company’s affairs then the trustee must do so if the interested person has a “permitted ground of complaint” which must be specified in the trust instrument.

The settlor can lay down rules regulating the appointment, removal, and remuneration of directors of the company owned by the VISTA trust. The rules, contained in the VISTA trust, could, for example, nominate a successor director (if the settlor is the director) on the settlor-director’s death.

The terms of the VISTA trust can call on the trustee to transfer the shares of the underlying BVI company to specified beneficiaries on the death of the settlor. In this way, the shares can pass to family members on the death of the settlor without the settlor therefore having to make a will and this measure avoids lengthy and costly probate issues, as well as providing potential tax advantages and peace of mind.

VISTA trusts and non-BVI companies It has already been noted that VISTA can only apply (directly) to BVI company shares.

If shares in non-BVI companies and/or other assets are to be held, these should be held by a BVI company the shares of which are held directly by the trustee of the VISTA trust.

WHEN TO SET UP A VISTA TRUST?

Where the trust assets or underlying assets of a trust are to comprise shares in a trading company.

Where the settlor is not prepared to relinquish control over the administration and management of the company.

Where the underlying assets of the trust comprise an unconventional investment portfolio e.g. ships, aeroplanes, futures, options and assets of a commercial nature.

Where the settlor wishes particular assets not to be disposed of e.g. family heirlooms or family companies.

Securitisations and off-balance-sheet structures.

Choosing the right Trustee

Why Experience Matters in Choosing a Trustee

In the labyrinthine world of wealth management, where fortunes can be made or lost with the turn of a market, the choice of a trustee holds profound significance. It’s a decision laden with emotion and apprehension, as affluent families grapple with the daunting task of safeguarding their assets for future generations. Yet, amidst the sea of options, one factor stands out as a beacon of stability and security: the established legacy of success of a professional trustee.

The Importance of an Established Legacy of Success

When considering potential trustees, the allure of novelty must be tempered by the wisdom of experience. While a friend or family member may seem a natural choice, their lack of expertise and resources can pose significant risks. Inexperienced trustees may falter when confronted with complex financial challenges or unforeseen circumstances, placing the family’s wealth in jeopardy.

In contrast, a professional trustee with an established legacy of success offers a compelling solution. With decades of experience and a wealth of resources at their disposal, these trusted partners provide the stability and security that affluent families crave. They operate within the correct legal framework, bound by fiduciary duty to act in the best interests of the beneficiaries. Their commitment to integrity and accountability instills confidence, assuaging the fears of settlors and beneficiaries alike.

The Emotional Landscape of Trust

For families of means, the thought of entrusting their wealth to another is fraught with uncertainty and fear. Will the chosen trustee have their best interests at heart? Can they weather the storms of economic upheaval? These questions weigh heavily on the minds of settlors, who seek assurance in an uncertain world.

In this quest for reassurance, experience becomes paramount. The knowledge that a trustee has navigated similar challenges before, weathered similar storms, offers a sense of comfort that cannot be overstated. It’s a reminder that, in the face of uncertainty, there are those who have stood the test of time.

Building Relationships: The Human Touch

Amidst the professionalism and expertise, there exists another crucial element in the trustee-settlor relationship: empathy and understanding. While professionalism is paramount, genuine human connection plays a pivotal role in fostering trust and confidence.

A professional trustee should not only possess the requisite skills and knowledge but also be empathetic to the needs of the settlor. Pleasant and approachable, they should know how to act appropriately and be willing to listen to the settlor’s point of view. Understanding how the settlor feels and recognising their fears is fundamental to building a strong and enduring relationship built on trust and mutual respect.

Conclusion

In the ever-evolving landscape of wealth management, the importance of experience, professionalism, and human connection cannot be overstated. By choosing a professional trustee with an established legacy of success and a genuine commitment to understanding the settlor’s needs, families can navigate the complexities of wealth preservation with confidence and peace of mind.

So, as you ponder the future of your family’s wealth, remember the wisdom of experience and the value of genuine human connection. By reading this article, you have embarked on a journey towards stability and security, guided by the knowledge that you’re in safe hands with a trustee who not only possesses the expertise but also understands and empathises with your needs and concerns.

CYPRUS TRUSTS

Cyprus trust law is modelled on the English Trustee Act of 1925 and was modernized under the Cyprus International Trust Law 1992, which was subsequently amended by Law 20 (I)/2012. The Cyprus International Trust Law is one of the most attractive trust frameworks in the world – with the added bonus of being within the EU.

Asset Protection

A Cyprus International Trust offers robust asset protection mechanisms, shielding assets from creditors, litigation, and other potential threats.

Confidentiality

Cyprus is renowned for its strict confidentiality laws, ensuring the privacy and anonymity of settlors and beneficiaries.

Succession And Estate Planning

A Cyprus International Trust provides an effective vehicle for succession planning, allowing settlors to dictate how their assets will be distributed upon their death, circumventing potentially lengthy and costly probate procedures.

Tax Planning

Cyprus offers favourable tax regimes for international trusts, with provisions for tax exemptions, reduced rates, and other incentives, making it an attractive jurisdiction for tax planning purposes.

Establishing a Cyprus International Trust

With our expertise in setting up international trusts and administering them, we can offer advice on how best to establish and maintain a Cyprus International Trust for an array of needs. A Cyprus International Trust can be set up for asset protection, confidentiality, as well as for estate and tax planning.

Additional Information:

Cyprus is a reputable and well-regulated jurisdiction for international trusts, offering a stable legal and financial environment conducive to wealth preservation and growth.

Under Cyprus law, a trust deed must be executed to establish a trust, specifying the trust’s terms, including the identity of the settlor, trustee, and beneficiaries, as well as the trust assets and purposes.

Cyprus International Trusts enjoy certain tax advantages, including exemptions from income tax, capital gains tax, and inheritance tax, subject to meeting specific conditions outlined in the legislation.

Furthermore, Cyprus’s membership in the European Union provides additional benefits, including access to EU directives and regulations, facilitating cross-border transactions and enhancing the trust’s credibility and recognition internationally.

In conclusion, a Cyprus International Trust offers a compelling solution for individuals seeking effective asset protection, confidentiality, and tax planning opportunities within a reputable and well-regulated jurisdiction. With our expertise and guidance, settlors can navigate the complexities of trust establishment and management with confidence, ensuring their wealth is preserved and their objectives are met.

JERSEY TRUSTS

The Jersey law of trusts is contained principally in the Trusts (Jersey) Law 1984, as amended by subsequent legislation. It embodies traditional trust principles developed by English law. Where Jersey law is silent on an issue relating to a Jersey trust, or where there is no judicial authority in Jersey to cover the matter, then the Jersey courts will refer to English and Commonwealth case law for guidance. In Jersey, there are no separate courts of law and equity. But this does not mean that an equitable jurisdiction does not exist. The courts have referred to their “equitable” jurisdiction, and Jersey’s Royal Court has expressly confirmed this. Clients can, therefore, have confidence that, in appropriate circumstances, the courts will be flexible in their interpretation of the law to ensure natural justice is done.

ADDITIONAL INFORMATION:

Jersey boasts a well-established and respected legal framework for trusts, offering stability and reliability for settlors and beneficiaries alike. The jurisdiction’s adherence to traditional trust principles, coupled with its flexibility in adapting to modern legal developments, makes it a preferred choice for international trust structures.

OWNING PRIVATE TRUST COMPANIES

A Private Trust Company (PTC) is an effective structure that offers many benefits. A PTC acts as a trustee of family trusts, allowing active management of the trusts to be undertaken by the settlor and his family. This arrangement provides greater control and flexibility over trust assets while maintaining confidentiality and privacy.

ASSETS AND CONFIDENTIALITY

A Jersey trust creates a private relationship between a settlor (or settlors), trustees, and beneficiaries, therefore acting as a suitable vehicle to hold a variety of assets within a confidential legal arrangement. Jersey’s robust confidentiality laws ensure the privacy and anonymity of settlors and beneficiaries, safeguarding their interests and preserving their wealth.

PLANNING VEHICLES

The discretionary trust is regarded as the prime offshore vehicle used to hold family assets, ensuring that their wealth is held in a safe and discrete environment. Jersey’s flexible trust laws allow for the establishment of tailored trust structures to meet the specific needs and objectives of settlors and beneficiaries, providing a secure and efficient platform for wealth preservation and succession planning.

HOLDING ASSETS

Jersey trusts are often used to hold assets off-balance sheet or to “orphan” special purpose vehicles or “SPVs”. Jersey purpose trusts are used to achieve this, often in conjunction with Jersey companies acting as the “SPV”. This structuring offers advantages in terms of asset protection, tax efficiency, and regulatory compliance, making Jersey a preferred jurisdiction for international business and investment activities.

CHARITY & PHILANTHROPY

High net worth families and corporates who have amassed wealth in offshore locations from their international businesses and other activities are increasingly seeking to create offshore entities to secure charitable and philanthropic objectives. Jersey provides a conducive environment for charitable and philanthropic endeavors, offering flexible and robust structures to support the charitable missions and objectives of individuals and organisations.

UK TRUSTS

The advantages derived from using UK trusts for UK inheritance tax planning are important to domestic taxpayers given that property price inflation is resulting in even modest estates being exposed to UK inheritance tax. UK trusts may also be used by non-UK domiciled or resident persons. One of the most common forms of UK trust is the discretionary trust.

MIXED RESIDENT TRUSTS

Under UK law, the rules of residence of trusts are such that if the settlor is non-UK resident and non-UK domiciled and provided that at least one of the trustees is non-UK resident, then such a trust will not be regarded as resident in the UK for tax purposes, even if there are UK trustees. This also assumes that no non-UK resident trustee of such a trust has a permanent establishment in the UK.

Such so-called mixed resident trusts can be used so that trust assets are vested by the settlor into the UK resident trustee on behalf of the full body of mixed resident trustees. Such an arrangement preserves the non-UK resident tax status of the trust while permitting income or gains arising from the assets vested in the UK trustee to be received safely onshore in a stable and secure environment but without UK tax cost.

ADDITIONAL INFORMATION:

UK trusts offer a versatile and effective tool for tax planning and asset protection for both UK residents and non-UK domiciled individuals. With the increasing exposure of estates to UK inheritance tax due to property price inflation, utilising trusts has become essential for preserving family wealth and minimising tax liabilities.

Furthermore, UK trusts provide a range of structuring options, including discretionary trusts, interest in possession trusts, and charitable trusts, allowing settlors to tailor their arrangements to meet their specific needs and objectives.

Mixed resident trusts, as described, offer a unique opportunity for non-UK residents to utilise UK trustees while maintaining the non-UK resident tax status of the trust. This can provide significant advantages for international clients seeking a stable and secure environment for their assets, particularly in jurisdictions with unstable political or economic conditions.

Moreover, corporate UK trustees offer additional benefits for international clients, providing access to international arrangements and expertise, along with enhanced security and confidentiality for trust assets.

In conclusion, UK trusts remain a valuable tool for tax planning and wealth preservation, offering flexibility, stability, and security for domestic and international clients alike. With careful structuring and expert guidance, trusts can be effectively utilised to achieve long-term financial objectives and protect family legacies.