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USES OF MAURITIAN TRUSTS

USES OF MAURITIAN TRUSTS. MUHAMMAD UTEEM LLM TEP. UTEEM CHAMBERS. A Law Firm registered under the Mauritius Law Practitioner’s Act. Mauritius International Financial Services: Onwards & Upwards. INTRODUCTION. Austin v Bailey (1962) Trusts Act 2001 - Qualified Trustee - Protector

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USES OF MAURITIAN TRUSTS

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  1. USES OF MAURITIAN TRUSTS MUHAMMAD UTEEM LLM TEP UTEEM CHAMBERS A Law Firm registered under the Mauritius Law Practitioner’s Act Mauritius International Financial Services: Onwards & Upwards

  2. INTRODUCTION • Austin v Bailey (1962) • Trusts Act 2001 - Qualified Trustee - Protector - Letters of Wishes - Remedies UTEEM CHAMBERS

  3. TAXPLANNING • Tax Incentive Trusts: • the settlor : non-resident global business licence holder another tax incentive trust  • all beneficiaries: non-resident global business licence holder • purpose trust carried out outside Mauritius UTEEM CHAMBERS

  4. ResidentTrusts • Access to double taxation treaty network • Rate of Taxation: 15% • Deemed foreign tax credit: 80% • Chargeable Income = net income minus aggregate amount distributed to Beneficiaries • Distribution to non resident Beneficiaries is exempt from tax. • Trusts v/s Companies UTEEM CHAMBERS

  5. ResidentTrusts • Definition of residency: • trust is administered in Mauritius and • a majority of the trustees are resident in Mauritius; or • the settlor resident in Mauritius at creation of trust • Foreign Trust can be resident in Mauritius UTEEM CHAMBERS

  6. ResidentTrusts • Custodian and Managing Trustees • No need to transfer trusts assets into the name of new managing trustees • Comfort factor for settlor • Costs and tax savings UTEEM CHAMBERS

  7. NON ResidentTrusts • 0 % tax • declaration of non-residence filed with the Commissioner of Income Tax within 3 months after the expiry of the income year • Use: - Accumulation of Income Trusts. - Special purpose vehicle. UTEEM CHAMBERS

  8. ASSETS PROTECTION TRUSTS • Trust assets separate from settlor’s assets • Trust not void or voidable by reason of settlor’s bankruptcy or attack by settlor’s creditors • Court may declare trust void if trust made with the intent to defraud creditors of the settlor at the time when trust property vested in trustee. • Action within 2 years from date of transfer to trust • Court will not enforce a foreign judgment in respect of claims of creditors in an insolvency • Must be planned carefully. Federal Trade Commission v Affordable Media LLC and other (the “Anderson case”) UTEEM CHAMBERS

  9. FORCED HEIRSHIP RULE • Restrictions on free disposal of property • the transfer or disposition shall not be set aside • foreign judgment in respect of succession rights not enforceable • Planning Tips: • Succession law. Immovable v/s movable assets • Restriction on disclosure of information • Beneficial interest automatically lapses if Beneficiary attacks the trust. UTEEM CHAMBERS

  10. STRUCTURED FINANCE UTEEM CHAMBERS

  11. LARGE NUMBER OF CREDITORS UTEEM CHAMBERS

  12. PENSION TRUSTS UTEEM CHAMBERS

  13. THE END • Thank you for your kind attention. UTEEM CHAMBERS

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