As a long-standing trust and corporate services provider, over the course of the last 25 years we have been privileged to have dealt with clients from all parts of the world, with a wide variety of requirements.
Looking specifically at the area of Isle of Man trusts, the words “wide” and “variety” are particularly apt. Trusts come in many different shapes and sizes – they are certainly not the exclusive domain of high net worth individuals who are motivated by saving tax. For although a percentage of trusts are tax-driven, there are many other reasons why someone might wish to establish such a structure.
So, we thought it would be helpful to give you some examples of how trusts can be highly effective vehicles for estate and succession planning – beyond reasons of tax efficiency (as sensible as this is, of course).
Our first case relates to a Bahraini national. For ease, we’ll refer to him as Mr B.
For a number of years, Mr B had owned a substantial property in London. It wasn’t ever used as his main residence, as he primarily lived in Bahrain, where he was subject to Sharia Law. This meant that upon death, his London real estate would automatically pass to his brother. Although he had no quarrel with his sibling, Mr B wanted to ensure that the property passed to his only child – a daughter, which under Sharia Law, would not have been possible.
To legitimately work around Sharia stipulations, Mr B spoke to his legal advisers in London as to how he could structure his affairs in a way that was more in line with his personal wishes. As a result, the London law firm made contact with us at Sterling and we worked with Mr B in order to put a plan in place.
We advised Mr B that the best route to take would be to transfer the ownership of the London property out of his personal name and into an Isle of Man company, which itself would be held within an Isle of Man trust, administered on his behalf by Sterling.
The trust would run for a defined period of time but, crucially, would ensure that the property would not form part of his estate and be subject to Sharia Law – and it could therefore be held for his and then Mr B’s daughter irrespective of his ultimate demise.
In this case, whilst there were no specific inheritance tax advantages which could be applied it did enable Mr. B to circumvent the restrictions facing him under Sharia Law. As a result, he is now safe in the knowledge that his wishes will be met and that his daughter will one day become the beneficial owner of the property.
Are you currently faced with a similar situation, living in a jurisdiction under Sharia Law, possibly involving property assets in London or other parts of the UK?
If so, you may like to learn more about the benefits of trust structures on the Isle of Man, an area in which we have extensive experience.
Call us in the strictest confidence on +44 1624 611146 or read more about trusts on our website www.sterling.im/trust/
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