Offshore Trust Costs & Taxes

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When an inshore trust doesn’t suit your needs, perhaps what you need is to move offshore. The common perception about offshore trusts, that it’s only for multimillionaires and big corporations, is wrong. It’s also suitable for medium to small scale businesses and individuals.

Many people have transferred to an offshore trust because the benefits are more attractive compared to the benefits received with an onshore trust. You should take into considerations offshore trust1  costs before you transfer your assets. Though the benefits are there, it’s advisable to consult a financial adviser2  to determine offshore trust costs.

Costs Of Setting It Up

A regular trust ensures a settlor that his wealth is transferred to his family when he dies. Setting up a trust in a foreign jurisdiction will help avoid creditors and other negative litigation effects. Offshore trust costs are not the same for everyone, it’s best to talk to your financial adviser to determine exact costs.

Setting up an offshore trust is generally the same as with inshore trusts. A first step is to find yourself a reliable trustee from a foreign jurisdiction. Before starting any transaction offshore, be sure to research the different countries on where it’s best to open up a foreign trust.

Depending on the offshore trust, costs may vary. Some offshore companies charge between $2000 and $3000 for the first year. Once you have chosen the company of your choice, you will need to start the paper work and the trust deed. Sign legal documents in front of your lawyer, trustee and other witnesses. State the exact assets that you want to be transferred to your beneficiary (s) when you pass away.

You can now transfer ownership of your assets to the offshore trust company of your choice. When the assets are successfully transferred, the trustee shoulders the full responsibility for them. Your beneficiary (s) will receive the properties that you left according to the conditions stated in the trust.

Choosing The Best Jurisdictions Based On Offshore Trust Costs

The jurisdiction of the trust is very important because of varying tax laws and specialisation in different types of trusts and offshore trust costs. Here are a few of the many favourable locations for affordable trust costs.

  • Belize – This jurisdiction provides modern and flexible protection for your assets. Numerous settlors form their trusts in Belize to protect their assets from creditors and judgements such as divorce or bankruptcy claims. Belize allows offshore trusts in its jurisdiction for up to 120 years from when the trust was created.
  • British Virgin Islands – British Virgin Islands has a trust legislation that is based mainly on English trust law. A trust formed in this jurisdiction has a fixed perpetuity period of not more than 100 years.
  • Cyprus – The most common type of trust in Cyprus is the international trust which has a period of 100 years from the date of creation. The income and assets of offshore trusts are non-taxable in this jurisdiction.

Protect your wealth for your loved ones and for future generations. You can contact us and speak to our financial adviser regarding offshore trust costs depending on your specific needs and the jurisdiction you choose.

Tax Implications

There are several benefits you can receive through an offshore trust. Offshore trusts have become quite popular as they provide more attractive benefits and low or zero tax benefits. One of the best ways you can protect your assets3  is by transferring it to an offshore trust.

When transferring assets to an offshore trust, it’s important that you take offshore trust tax implications into consideration. This will help you make the right choices in choosing the right jurisdiction.

Holding your assets in an offshore trust does not mean that you will not be taxed. It’s advisable to talk to your financial adviser about offshore trust tax implications before transferring any assets offshore.

Inheritance Tax

When you transfer your assets to an offshore trust, the inheritance tax implications are the same. The transfer to the offshore trust will be a chargeable lifetime transfer (CLT).

Though you can benefit from some tax savings,4  the process is not smooth sailing. You will still need to check with your financial adviser about the specific details. There are certain HMRC anti avoidance that could apply.

Capital Gains Tax

There are certain HMRC anti avoidance rules that could apply to UK domiciles who choose offshore trusts, especially in terms of the capital gains tax (CGT). The offshore trust, unless it held UK trade will be outside the scope of capital gains tax in the UK. There’s no capital gains tax that will be imposed on the offshore trust as it’s located in an overseas jurisdiction. This is one of the reasons why offshore trusts are becoming popular.

The HMRC anti avoidance rules attribute that the capital gains tax will not be applicable if the settlor is dead. If the transfer to the offshore trust is made on the death, then the ancillary benefit of the capital gain to the date of the settlor’s death is eliminated.

Income Tax

Since the offshore trust is located in an overseas jurisdiction, it will be exempt from paying UK income tax on foreign income. Hence, by retaining the trust’s income producing investments offshore, the trust will be able to avoid UK income tax liability.

It is recommended to talk to a financial adviser about offshore trust tax implications in detail before transferring your assets overseas.

Next Steps

There are several overseas jurisdictions you can choose for your offshore trust. If you are considering transferring your assets to an offshore trust, these offshore trust next steps will give you an idea how to go about setting things up. It’s also recommended to talk to a financial adviser before you start the process.

Forming an offshore trust involves entering into an agreement with a trustee.


After choosing the beneficiaries for your offshore trust, you will need to choose the type and quantity of assets you want to move offshore.

After deciding what assets you want to transfer to the offshore trust, you will need to have your attorney/solicitor prepare the document called the Trust Deed’. This deed will be part of the offshore trust application and is the official document of the trust.


The first step in offshore trust formation is to find the right trustee. There are several offshore trusts, but it’s up to you to choose the right trust in the most suitable jurisdiction.5 


Once you have chosen the right trustee and the overseas jurisdiction, you will need to choose your beneficiaries. It’s up to your personal discretion to choose the number of beneficiaries for your offshore trust.


When the Trust Deed’ is ready, you can start the application process. Most offshore trusts will have an online application process, so you will need to make your application using the online service. You will have to apply with the necessary forms and applications. Forms will have to be posted (courier) along with the original Trust Deed’ and other documents.

KYC (Know Your Customer)

All offshore trust formations require that the applicant submit a copy of his/her passport, proof of residential address (utility bill or bank statement) and professional references. These documents could be scanned or sent by fax.

Certain offshore trusts also allow offline applications, in case you are not too sure about using the online service.

You can contact us and speak to our reputed financial adviser for more information on offshore trust next steps. A financial adviser will be able to answer any question you might have regarding forming an offshore trust.

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