Anguilla trust company

Anguilla Trusts

The new Trusts Act is the culmination of an exhaustive study of the trusts legislation of many other jurisdictions. The decision was taken to repeal the existing trusts legislation and replace it with a completely new Ordinance, rather than attempt to amend it.

The Trusts Ordinance, which has its roots in English trust law, provides a framework so flexible that the only limitation to its use is the imagination of the trust practitioner. Specifically, the Ordinance allows commercial or charitable purpose trusts, unit trusts, spendthrift trusts, asset protection trusts and what are termed variant trusts. The provision for variant trusts allows a settlor to create a trust (in whatever form and by whatever name) of a type recognized by the law or rules of his religion or nationality or which is customarily used by his community.

The Ordinance provides for a protector of the trust (who may be the trustee). The protector may be provided with the power to remove the trustee and to appoint new or additional trustees.

The Rule Against Perpetuities has been abolished and accumulation of income throughout the full term of a trust is possible.

The Fraudulent Dispositions Ordinance provides that a fraudulent disposition is voidable by a creditor provided that the settlor was insolvent at the time of the disposition or became so as a result thereof and provided that the creditor commences his action within three years of the date that the assets were settled into trust. The burden of proving that the settlor was or became insolvent as a result of the transfer is on the creditor.

In relation to asset (or creditor) protection trusts, therefore, Anguilla has deliberately taken a more conservative approach than some jurisdictions.

Where a trust is created under the laws of Anguilla, the Court shall not vary it, set it aside or recognize the validity of any claim against the trust property pursuant to the law of another jurisdiction or the Order of another Court in respect of:

  • marriage or its termination;
  • succession rights;
  • the claims of creditors in an insolvency;
  • the imposition of any foreign tax or duty. Because of its flexibility, a trust can be used to perform many different functions: to minimise or avoid tax liability, to facilitate lifetime financial management, to protect assets, to preserve family wealth, to ensure continuity of a family business, to donate to charities, to negate forced heirship laws, to create a pension scheme for employees or dependents.

Advantages of Anguilla Trusts:

  • Minimise or avoid tax liability: Because it distinguishes asset control from ownership, the trust, in spite of the ever-increasing amount of anti-avoidance legislation, is still one of the most powerful tax planning tools available;
  • Facilitate lifetime financial management: The use of a trust can effectively centralise an individual's financial affairs in a single vehicle, allowing for ease of management;
  • Protect assets: Litigation and political instability are two of today's biggest threats to one's assets. An asset protection trust can do much to alleviate this problem;
  • Preserve family wealth: Assets or business interests created over a lifetime can be protected against dissipation by providing for a plan of accumulation and orderly distribution amongst heirs;
  • Continue a family business: Corporate structures can be effectively owned and administered by a trust, whilst providing for the distribution of income as needed;
  • Donate to charities: A trust can administer income so as to accommodate the settlor's wishes with respect to charitable distributions;
  • Negate forced heirship laws: Some jurisdictions make arbitrary heirship provisions, which may be contrary to the wishes of the settlor. A trust can be used to avoid such legislation;
  • Create a pension scheme for employees or dependents: A trust can be an efficient vehicle for accumulating and distributing pension income amongst employees or family members.

Perhaps most importantly, a trust, or a trust in conjunction with a company or partnership, can be an effective estate planning tool or will-substitute.

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