Using a trust to own the shares of a GBC1 company can result in very substantial tax and non-tax related advantages accruing both on death and during the lifetime of the trust settlor.
Offshore trust benefits can be summarised as follows:
- Saving on inheritance tax: On death, the inheritance tax which would normally be assessed on the value of the shares would generally be eradicated.
- Asset protection: Assets placed into trust are generally beyond the reach of creditors who might arise as a result of financial difficulties, divorce proceedings, litigation etc.
- Avoidance of probate: A trust provides a means whereby assets can be smoothly passed on to the next generation without the disruption, delays, substantial costs, loss of confidentiality associated with the probate procedure which necessarily follows when assets are bequeathed by will.
- Lifetime tax savings: During lifetime, substantial income and capital gains tax advantages may result from setting up the trust.