Turk & Caicos Islands
Country code – TC
Legal basis – Common law
Legal framework – Trusts Ordinance 2016
Formal name – Trust
Settlor – The settlor is the person who establishes and whose assets are put into the trust. It may be either an individual or a legal entity.
The settlor may reserve significant listed powers for himself without affecting the validity of the trust and may also be a beneficiary. There may be protection from a subsequent bankruptcy after assets are gifted to the trust.
Trustee – Trustees are the legal owner of the assets who have a fiduciary and statutory obligation to act in the best interest of the beneficiaries.
The number of trustees of a trust shall be not less than two unless only one trustee was originally appointed or the sole trustee is a professional trustee, or the terms of the trust provide otherwise.
Trustees may be corporate bodies or individuals.
Custodian trustees are not permitted.
Beneficiaries – Beneficiaries are those who get benefit from the trust. Beneficiaries may be natural persons or body corporates.
The terms of a trust may provide for the addition or removal of a person as a beneficiary or the exclusion of a beneficiary from benefit either revocable or irrevocable, may impose an obligation on a beneficiary as a condition of benefit.
There are no specific provisions in the law to prevent beneficiaries from draining the trust of its assets and spending in a thrifty way. There are specific legislative provisions to avoid probate and forced heirship.
Enforcer – An enforcer is not mandatory, unless for purpose trusts.
Disclosure – The trustee is not required to disclose to any person any document showing he has exercised a power or discretion or performed a duty, nor to disclose to any person other than a beneficiary any document relating to or forming part of the accounts of the trust, unless required to do so by the terms of the trust or by an order of the court.
Protection from foreign judgments – The Trusts Ordinance includes limited provisions to ignore and not enforce foreign judgments. The Hague Convention on Trusts does not apply in Turks & Caicos.
Protection from creditors – The Trusts Ordinance does not repeal the Statute of Elizabeth, so transfers by the settlor to the trust may be set aside if the settlor transferred the property before the debt arose. The creditor must prove the fraudulent transfer of assets to the trust, which is clearly defined by the law. Creditors’ claims may not be brought jointly. If a fraudulent transfer is proven, the trust may not be declared invalid.
Protection for immigrant trusts – Trusts that migrate from other jurisdictions do not benefit from retroactive protection.
Community property – Community properties transferred to a Turks & Caicos trust may not retain its community property character.
Exclusion of foreign law - There are provisions in the legislation to be able to exclude foreign law.
Choice of law – The choice of law of Turks & Caicos to govern the trust or a particular aspect of that trust, is binding, valid, effective and conclusive regardless of any other circumstances.
Duration – There is no rule against perpetuities. An instrument creating or varying a trust may provide for the duration and date of termination of the trust.
Compliance – There are no annual reporting requirements.
- Settlor as a beneficiary
- Bankruptcy protection
- Ignore foreign judgements
- Hague convention on trusts
- Choice of law is binding
- Protection from immigrant trusts
- Community property provisions
- Custodian trustee permitted
- Rule against perpetuities (years)
- Limited Specific exclusion of foreign law
- Subject to CL rules Settlor can retain control
Protection of Settlor
Protection from foreign judgements
- Avoidance of forced heirship
- Spendthrift provisions
- Exclusion of Statute of Elizabeth laws
- Trust invalid if transfer fraudulent
- Creditor must prove fraudulent transfer
- Clear definition of fraudulent transfers
- Separation of creditor claims
- Statutory limitation on fraudulent transfer
Protection of Beneficiary
A trust established in the Turks & Caicos Islands may not be subject to local taxes applicable to the assets and income of the trust, provided that no residents of the Turks & Caicos Islands benefit from the trust and no physical assets are located there.
It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.
You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in the Turks & Caicos Islands, transfer assets to it and receive profits from said assets.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- - Offshore Income Tax Rate
- - Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 6% Personal Income Tax Rate
- 0 Tax Treaties
The Turks and Caicos Islands are a British overseas territory, consisting of the larger Caicos Islands and smaller Turks Islands, two groups of tropical islands in the Lucayan Archipelago of the Atlantic Ocean and northern West Indies. They are located north of the island of Hispaniola where Haiti and the Dominican Republic are located.
Cockburn Town, the capital, is about 1,042 kilometers (647 miles) to the southeast of Miami. The islands, with 948 sq. km of total surface area, are geographically contiguous to the Bahamas.
Its official language is English and its official currency is the United States Dollar (USD).
As a British territory, its sovereign is Queen Elizabeth II of the United Kingdom, represented by a governor appointed by the monarch, on the advice of the Foreign Office.
The Turks and Caicos economy, like other Caribbean islands, is based on tourism, offshore financial services, and fishing.
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