Offshore trusts have become an increasingly popular concept not only for tax and estate planning purposes but also as a vehicle to hide money that is “illegally” invested abroad.
With the announcement that you will now be able to invest R200 000, the marketing of offshore trusts is likely to increase.
Amanda Shorn of Investec associate company Integro Financial Services says over the last three decades there has been widespread and increasing use of “offshore” trusts as a way of holding personal wealth confidentially.
Many tax havens or low tax jurisdictions have enacted trust laws to protect investors. One example is Jersey, in the Channel Islands, where a substantial number of trusts are administered. The governing body of Jersey has control over trading licences and may withdraw these where the good name and reputation of the island is threatened or impaired.
Shorn says legal obligations imposed upon a trustee are onerous. Trustees may be sued by beneficiaries if in breach of trust, with the protection of beneficiaries being a primary concern.
Shorn says the advantages of trusts are many and varied. Specific types of trusts and the advantages will depend on the needs and requirements of the settlor’s (the one …