Offshore structures & estate planning

Offshore Structures and estate planning

There are several different ways to use offshore structures for estate planning, ranging from transferring interests via shares to using foundations and trusts.

Transferring interests via shares

In the simplest scenario, assets can be placed into a corporate vehicle and the interests transferred either through a formal transfer of the shares of the offshore company or by handing over the shares in the offshore company to the transferee (if these are bearer shares).

This ensures continuity in the use of the assets concerned, and is an efficient method of transferring the interests in them. The structure also provides a way of transferring registered assets (e.g. shares) without necessarily being obliged to advise third parties of the transaction.

There may be significant additional benefits as well. For example, if real estate is transferred or left by an individual under a will to another party, there could be implications for local transfer tax, stamp duty and other taxes (capital gains, gifts and inheritance taxes). The transfer of shares in the company holding the real estate, however, may avoid some or all of these taxes. Further, if the assets themselves are subject to sales tax when transferred directly, this problem may be avoided through transferring shares in the entity holding the assets. This can be particularly useful where otherwise the sales tax would not be recoverable for the payor.

Using foundations

A more sophisticated estate planning structure can be realised by using a foundation.

There are also many other interesting ways to set up structures to meet your estate planning needs. Please talk to us about these.