Why An Isle of Man Trust?

  • The Isle of Man Trust law is closely modelled upon well established English Trust Law
  • It is possible for a settlor to reserve certain powers within the trust deed, called ‘Settelor reserved powers’. These can be reasonably wide ranging and gives the Settlor control over appointing and removing trustees and beneficiaries of the trust.
  • Isle of Man legislation places a high duty of care on trustees which provides added protection for settlors and beneficiaries.
  • The principal legislation governing Isle of Man Trust law is the Trust Act 1995 and it’s amended version, the Trust Act 2015
  • Isle of Man offshore trust deeds are not publicly registered or accessible

Types of Isle of Man Trusts


Discretionary Trusts
Discretionary trusts are the most commonly used form of Trusts in the Isle of Man. Discretionary interest trusts are where assets can be held for a class of beneficiaries with distributions being made at the discretion of the trustee. This means that no beneficiary is entitled to call on the trustees to distribute capital and income. If the terms of the trust allow it, the trustees may not even be obliged to pay out capital or income to any of the beneficiaries.

Fixed Trusts
Fixed interest trusts are where the trust deed can set out the specific beneficial interests of each beneficiary, such as a right to the income earned by the trust assets, regardless of whether he will also become entitled to a fixed share of the capital of the trust fund.

 

There is no capital gains, income, inheritance, gift or estate taxes levied on offshore trusts held in the Isle of Man where trustees and beneficiaries are non residents of the Isle of Man.

Specifications for Trustees, Settlors and beneficiaries


Under Isle of Man trust law, certain specifications relating to the parties involved in the trust must be satisfied.   

WHO MAY BE A SETTLOR?

Any individual of sound and mind over 18 may be a settlor of an Isle of Man trust. A company may also be a settlor subject to powers within the company articles.

WHO MAY BE A TRUSTEE?

Any individual of sound mind and over 18 may be a trustee to an Isle of Man trust. A company may also be a trustee subject to powers within the company articles. In the Isle of Man there is no requirement for a corporate trustee to have particular status as a ‘trust corporation’.

The settlor or any of the beneficiaries may be appointed as trustees, though beneficiaries should be aware of a potential conflict of interest.

WHO MAY BE A BENEFICIARY?

All individuals can be beneficiaries of an Isle of Man trust, including unborn persons, minors and persons of unsound mind.

A settlor may also be a beneficiary and, as mentioned above, a trustee may be one of the beneficiaries.


Isle of Man Trust Act 2015 Amendments


1. The requirement for an Isle of Man trust to have either a trust corporation or two individuals acting as trustees in some circumstances has been removed allowing one trustee to fulfil the role.

2. The 2015 amended Act has removed the requirement that a beneficiaries’ interest in a trust must vest with a specific time frame, though Settlors mays still include time frame provisions within the Trust.

3. Protective legislative provisions in the Act has widened the exclusion of foreign law when determining the validity trusts governed by the laws of the Isle of Man or the capacity of parties concerned with the trust.

Forming an Isle of Man Trust

The creation of an Isle of Man trust can be a simple and straightforward process. Forming a Trust requires the execution of a trust deed by the parties involved  and the receipt by the trustees of some holding, which is often for convenience a nominal cash sum, upon which the trust can operate.

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Offshore Universe responds promptly to any query regarding the establishment of an Offshore Trust.

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