1. Advantages of Discretionary Trust:
- Restrictions /controls over the enjoyment of property
- Multiple enjoyment
- The holding, protecting and controlling of family property
- Asset protection
- Commercial transactions
- Overseas ownership of property while retaining beneficial enjoyment
- Strict confidentiality of the identity of the settlor, the beneficiaries and information relating to trust affairs
2. Key Features of BVI Vista Trust:
- Common Law jurisdiction.
- Possibility for the settlor to leave on his death letters of wishes setting out how he/she would wish the trust to be administered
- Anti-forced heirship rules
- Possibility to accumulate income for any period during the duration of the trust
- Trust instrument may contain power to vary terms of trust
- No disclosure of the trustees’ deliberations, the name of the settlors and the beneficiaries unless by a Court order.
- BVI Vista Trust are mainly used to hold shares of a BVI Company
- Trusts not being void or voidable due to the insolvency of settlor or proceedings against him or latter being declared bankrupt. However, such trust may be void if the creditors prove beyond reasonable doubt that the intention of the settlor at the time of creating the trust was to defraud him. The onus of proof rests on the creditor and no request for setting aside the trust will be entertained after more than 2 years from the transfer or disposal to the trust.
Either an individual or a corporation may act as the Trustee of a BVI Vista trust but it is becoming increasingly common to use a corporate trustee as this avoids problems which might result from the death, illness or retirement of an individual trustee and provides for continuity of administration.
Trustees can however, nominate Directors and grant management powers of the BVI Vista Trust to nominee of the settlor.
Under a discretionary trust we have seen that the Trustees control the trust funds and have a high degree of discretion over what happens to those funds. If the Settlor of the BVI Vista Trust attempted to retain some control over the trust funds then this may result in the trust being declared invalid and/or the trust being considered as resident in the jurisdiction within which the Settlor is resident. Both these consequences may have serious tax implications for the trust itself and the Beneficiaries. Certain safeguards for the Settlor may be found by appointing a Protector. Typically the Protector / Enforcer would be a family friend, relative or trusted advisor who has powers under the Trust Deed and to enforce the terms of the Trust Deed. However if Directors are appointed to manage the BVI Vista Trust, the Protector need not be appointed since all powers will be vested in the Director esp. controlling the underlying BVI Co
A BVI Vista trust is not liable to any taxes if the trust beneficiaries are not BVI residents.
It is possible that the setting up of the BVI Vista trust will result in tax consequences for the Settlor and also possible that, although no tax would be payable in BVI, there may be ongoing tax consequences for the Settlor and/or the Beneficiaries in their Country of residence. These possible tax consequences will depend upon the domicile and tax residency of the Settlor and Beneficiaries and therefore local advice should be sought on these matters.
Renewal of BVI Vista Trust, to be paid on anniversary date of incorporation. Failure to do so results in penalties.
Latest valid passport copy and recent utility bill for address proof of protector and beneficiaries are required to be submitted at every renewal as a part of enhanced due diligence.
7. Documents Required in Setting Up a BVI Vista Trust:
- Application form duly completed and signed
- Passport – original to be verified personally in our office, otherwise client can provide an original notarized copy of the passport
- Proof of address (in the form of utility bill, dated less than 3 months)
- Bank reference (dated less than 3 months with satisfactory record clearly mentioned and also the time period the client has been dealing with the bank: minimum of 2 yrs)
- Second identification.
- Professional reference letter (can be issued by Lawyer or Certified Public Accountant)
- Letter of wishes (indicating the details on the beneficiaries)
- Name of the BVI company whose shares will be put into the Trust.