Offshore Trusts & Private Foundations are commonly used as Asset Holding Vehicles.
So why bother transferring ownership of an onshore asset such as Real Property to an Offshore Trust or Private Foundation?
Most Trust & Estate Practitioners would tell you that the benefits of transferring ownership of property to a tax free Offshore Trust or Private Foundation include:
(a) It will enable your successors to avoid (if you are the owner of the property in your own name) having to pay Inheritance tax in respect of the property when you pass on.
(b) It will enable you to control ever after (ie even after you’ve passed on) what happens with the property and who gets to benefit financially from the property, when and in what amount
(c) It will protect the asset from anyone trying to sue you (and or from avaricious governments)
(d) It should enable you to avoid having to pay CGT (Capital Gains Tax) ultimately when the property is finally sold (ie if you set up an Offshore Trust or Foundation and structure it a certain way)
(e) It should enable you to reduce the amount of tax that would otherwise be payable on nett profits generated from renting the property
(and contrary to what you may have heard it doesn’t cost an arm or a leg to set up an Offshore trust or Private Foundation. Such an entity can be set up for as little as $US1,600!)
Note you should consult your local Lawyer and/or Financial Adviser and/or Accountant before transferring ownership of an asset to an Offshore entity as tax may apply on the transfer (eg CGT and/or Stamp Duty)
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