Set Up Offshore Charitable Trust Facts

Set Up Offshore Charitable Trust: A Way To Protect Your Assets

In the UK, the Inland Revenue department has had great bit of respect for the concept of trust, since such organisations has an essential role to play in the country's economy. However, this esteemed position of trust as a concept, has met with bitter criticism, since it has and always will be an excellent vehicle of tax evasion. As a UK citizen, you can set up offshore charitable trust, as a method to protect your asset. This could be done through an underlying offshore company, where-by you avoid 25% to 35% income tax on your UK income source, at rates applicable to such trusts.

The setting up of offshore charitable trust is very much in the same line with the process of setting up a domestic charitable trust. The donor transfers his assets to the trust, and the trustee is generally a nonprofit organisation, which operates outside the jurisdiction of the country where the donor lives. The funds accrued from the assets so transferred are utilised in the specific causes of charity. At the same time, the offshore trust set up by you, takes advantage of the favourable asset protection, and other laws that exist in other parts of the world.

In terms of benefit, you get to pay a much lower income tax as per the laws of the offshore country, gaining tax benefits on your donations. You would not have to pay any tax on investments either, and since it is a charitable trust, which is a nonprofit organisation, it will be exempted from business tax. In such a typical set up of offshore charitable trust, the trustees have the discretion to spend the funds accrued on specified causes of charity. You being the donor may also become a member of the Board of Trustees. The term of the trust so set up, could be for a limited time, or it may continue after the donor's death.

When you set up offshore charitable trust, it is established under the laws of the country where it has been set up. This is a country which should provide you with the most favourable conditions, being governed by the local law set for charitable trusts. If there should be a legal suit pursued against the trust by a creditor, the suit should have to be filed in the country where the charitable trust organisation has been established. This would mean that, in order to stake his claim, the creditor has to travel to the offshore country to prosecute the claim against the trust.