Comparative Guides

Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.

Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.

Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.

4. Results: Answers
Private Client
1.
Legislative framework
1.1
Which legislative provisions govern private client matters in your jurisdiction?
Turks and Caicos Islands

Answer ... English common law and equity apply, as modified by Turks and Caicos Islands (TCI) legislation. Ordinances (TCI statutes) applicable to private client matters include the following:

  • the Trusts Ordinance 2016;
  • the Companies Ordinance 2017;
  • the Companies and Limited Partnerships (Economic Substance) Ordinance 2018;
  • the Confidential Relationships Ordinance;
  • the Proceeds of Crime Ordinance and subsidiary legislation;
  • the Wills Ordinance;
  • the Inheritance (Family Provisions) Ordinance;
  • the Intestacy Ordinance;
  • the Probate and Administration Ordinance and Probates (Re-Sealing) Ordinance;
  • the Overseas Judgments Ordinance;
  • the Immigration Ordinance;
  • the Registered Land Ordinance; and
  • the Stamp Duty Ordinance.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
1.2
Do any special regimes apply to specific individuals (eg, foreign nationals; temporary residents)?
Turks and Caicos Islands

Answer ... There is no restriction on the ownership of real estate by foreign nationals or non-residents.

Temporary or permanent residence in the TCI may be acquired, with or without the right to work, on the basis of investment.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
1.3
Which bilateral, multilateral and supranational instruments in effect in your jurisdiction are of relevance in the private client sphere?
Turks and Caicos Islands

Answer ...

  • The US Foreign Account Tax Compliance Act (Model 1 IGA UK and US);
  • The Common Reporting Standard;
  • Tax information exchange agreements with various countries; and
  • Mutual legal assistance treaties with various countries.

See www.gov.tc/eoi/ for further information.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.
Taxation
2.1
On what basis are individuals subject to tax in your jurisdiction (eg, residence/domicile/nationality)? How is this determined?
Turks and Caicos Islands

Answer ... The Turks and Caicos Islands (TCI) has no direct taxes. Tax revenue is derived from indirect taxes, including taxes on imports and consumption.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.2
When does the personal tax year start and end in your jurisdiction?
Turks and Caicos Islands

Answer ... Not applicable.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.3
With regard to income: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What taxes are levied and what are the applicable rates?

None.

(b) How is the taxable base determined?

Taxes apply to goods and services, not to individuals.

(c) What are the relevant tax return requirements?

None.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.4
With regard to capital gains: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What taxes are levied and what are the applicable rates?

None.

(b) How is the taxable base determined?

Not applicable.

(c) What are the relevant tax return requirements?

None.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.5
With regard to inheritances: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What taxes are levied and what are the applicable rates?

None (there is a nominal probate tax).

(b) How is the taxable base determined?

Not applicable.

(c) What are the relevant tax return requirements?

None.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.6
With regard to investment income: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What taxes are levied and what are the applicable rates?

None, save that there is a retention tax on bank interest for EU residents (giving effect to the EU Directive on Taxation of Savings Income) in the form of interest payments imposed by the Retention Tax Ordinance, at the current rate of 35%.

(b) How is the taxable base determined?

Not applicable.

(c) What are the relevant tax return requirements?

None.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.7
With regard to real estate: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What taxes are levied and what are the applicable rates?

There are no property taxes or undeveloped land tax. Stamp duty is payable on the purchase and sale of real estate. There is a sliding scale on properties purchased up to $500,000 and thereafter a 10% rate applies. If you purchase or sell the shares of a TCI land holding company, an 8% duty applies pro rata on the percentage of shares acquired, based on the underlying market value of land owned by the company. Some duty rates may vary by island or as a result of temporary economic concessions.

(b) How is the taxable base determined?

Situs within the TCI.

(c) What are the relevant tax return requirements?

Duty is assessed based on the value declared in the conveyance or market value, whichever is higher.

(d) What exemptions, deductions and other forms of relief are available?

There may be various applicable exemptions, deductions or other forms of relief.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.8
With regard to any other direct taxes levied in your jurisdiction: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What are they and what are the applicable rates?

None.

(b) How is the taxable base determined?

Not applicable.

(c) What are the relevant tax return requirements?

None.

(d) What exemptions, deductions and other forms of relief are available?

Not applicable.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
2.9
With regard to any indirect taxes levied in your jurisdiction: (a) What taxes are levied and what are the applicable rates? (b) How is the taxable base determined? (c) What are the relevant tax return requirements? and (d) What exemptions, deductions and other forms of relief are available?
Turks and Caicos Islands

Answer ... (a) What are they and what are the applicable rates?

  • Import duties at various rates; and
  • 12% tax on:
    • all tourist services;
    • hotel and villa accommodation for non-residents; and
    • food and beverages served in restaurants

(b) How is the taxable base determined?

Consumption based.

(c) What are the relevant tax return requirements?

  • Customs declaration on entry.
  • Accommodation and service tax returns are handled by the hospitality provider.

(d) What exemptions, deductions and other forms of relief are available?

Concessions may be available to support developments anticipated to have a significant beneficial economic impact on the islands.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
3.
Succession
3.1
What laws govern succession in your jurisdiction? Can succession be governed by the laws of another jurisdiction?
Turks and Caicos Islands

Answer ... The Turks and Caicos Islands (TCI) follows English common law in regard to succession

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
3.2
How is any conflict of laws resolved?
Turks and Caicos Islands

Answer ... The TCI follows English private international law in regard to conflict of laws.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
3.3
Do rules of forced heirship apply in your jurisdiction?
Turks and Caicos Islands

Answer ... No, there are no rules which confer forced heirship or restrict the freedom of testators to dispose of their property as they wish.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
3.4
Do the rules of succession rules apply if the deceased is intestate?
Turks and Caicos Islands
Yes. These are set out in the Intestacy Ordinance.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
3.5
Can the rules of succession be challenged? If so, how?
Turks and Caicos Islands

Answer ... In the case of someone who dies domiciled in the TCI, there are limited rights to obtain provision for certain dependants. These are governed by the Inheritance (Family Provisions) Ordinance.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.
Wills and probate
4.1
What laws govern wills in your jurisdiction? Can a will be governed by the laws of another jurisdiction?
Turks and Caicos Islands

Answer ... The Wills Ordinance.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.2
How is any conflict of laws resolved?
Turks and Caicos Islands

Answer ... The Turks and Caicos Islands (TCI) follows English private international law in regard to conflict of laws.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.3
Are foreign wills recognised in your jurisdiction? If so, what process is followed in this regard?
Turks and Caicos Islands

Answer ... There are limited statutory provisions for the resealing of grants of probate from US courts and some commonwealth jurisdictions; otherwise, foreign wills need to be granted probate in the TCI.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.4
Beyond issues of succession discussed in question 3, are there any other limitations to testamentary freedom?
Turks and Caicos Islands

Answer ... None.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.5
What formal requirements must be observed when drafting a will?
Turks and Caicos Islands

Answer ... England’s Wills Act 1837 applies in the TCI.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.6
What best practices should be observed when drafting a will to ensure its validity?
Turks and Caicos Islands

Answer ... English best practices will generally apply, but it is essential to have a will governing TCI property (real or personal) drafted or reviewed by an attorney admitted to practise in the TCI.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.7
Can a will be amended after the death of the testator?
Turks and Caicos Islands

Answer ... No.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.8
How are wills challenged in your jurisdiction?
Turks and Caicos Islands

Answer ... Under limited circumstances, in proceedings before the Supreme Court of the TCI.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
4.9
What intestacy rules apply in your jurisdiction? Can these rules be challenged?
Turks and Caicos Islands

Answer ... These rules are set out in the Intestacy Ordinance.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.
Trusts
5.1
What laws govern trusts or equivalent instruments in your jurisdiction? Can trusts be governed by the laws of another jurisdiction?
Turks and Caicos Islands

Answer ... English rules of equity apply, as modified by the Trusts Ordinance, which is broadly based on the law of the States of Jersey. Trusts administered in the Turks and Caicos Islands (TCI) may be governed by the laws of another jurisdiction.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.2
How is any conflict of laws resolved?
Turks and Caicos Islands

Answer ... The TCI follows English private international law in regard to conflict of laws.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.3
What different types of structures are available and what are the advantages and disadvantages of each, from the private client perspective?
Turks and Caicos Islands

Answer ... The TCI affords a full range of wealth planning structures, with trusts (including settlor reserved powers, firewall provisions, purpose trusts and special trusts of company shares), companies, limited partnerships and joint ventures.

Particular strengths of the jurisdiction include:

  • the ability to form and administer a family investment pool where assets can be aggregated from different arms of the family structure and managed to achieve economies of scale; and
  • access to private-marked opportunities that may not otherwise be available.

To properly assess the advantages and disadvantages of different structural components, advice should be taken from TCI-qualified professional advisers with expertise in planning complex arrangements which involve an advisory team in multiple jurisdictions and disciplines.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.4
Are foreign trusts recognised in your jurisdiction? If so, what process is followed in this regard?
Turks and Caicos Islands

Answer ... The TCI Trusts Ordinance provides that a foreign trust, or a severable aspect of a trust, may be governed and interpreted in accordance with its proper law (normally the law of the jurisdiction designated by the terms of the trust).

A foreign trust is enforceable in the TCI, except to the extent that it:

  • purports to do anything contrary to the law of the TCI, or confer any right or power or impose any obligation that is contrary to the law of the TCI; or
  • is immoral or contrary to public policy.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.5
How are trusts created and administered in your jurisdiction?
Turks and Caicos Islands

Answer ... Trusts are usually created by the execution of a trust instrument, which is private and is not required to be registered. In certain circumstances a trust may be brought into existence verbally or by operation of law.

Administration is governed by the principles of English common law and equity, supplemented by the TCI Trusts Ordinance and the Trustees Licensing and Supervision Ordinance, Regulations and Code.

The TCI Financial Services Commission licenses and supervises the conduct of trust business and the provision of trustee services, with required professional insurance, annual audits and periodic as well as ad hoc regulatory inspections.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.6
What are the legal duties of trustees in your jurisdiction?
Turks and Caicos Islands

Answer ... Trustees are held to the same high standards of responsibility as in most jurisdictions based on English law.

Trustees are required to act with due diligence, as would a prudent person, and to the best of their ability and skill. They are required to observe the utmost good faith.

They are also required, as far as reasonable, to preserve and enhance the value of trust property.

A trustee may not, unless expressly permitted:

  • profit directly or indirectly from the trusteeship;
  • cause or permit any other person to do so; or
  • enter into any transaction relating to the trust for his or her own account.

Trustees must:

  • keep proper accounts and records for trust for a minimum of five years from the date on which they are prepared; and
  • keep trust property segregated.

Trustees must act impartially as between beneficiaries, but may nonetheless exercise a discretion between them if such discretion is explicitly conferred by the terms of the trust.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.7
What tax regime applies to trusts in your jurisdiction? What implications does this have for settlors, trustees and beneficiaries?
Turks and Caicos Islands

Answer ... There are no direct taxes applicable to trusts in the TCI. Settlors, trustees and beneficiaries thus have considerable flexibility in planning structures without the impact of local taxation.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.8
What reporting requirements apply to trusts in your jurisdiction?
Turks and Caicos Islands

Answer ... None, save under the US Foreign Account Tax Compliance Act, the Common Reporting Standard or automatic exchange of information regimes (reporting requirements may apply in other jurisdictions in which trust property is held).

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
5.9
What best practices should be observed in relation to the creation and administration of trusts?
Turks and Caicos Islands

Answer ... Careful selection of trustees, regular reporting and periodic meetings are recommended. Asset allocation and investment policies should be thoroughly considered and discussed. It is also vital to ensure that there is clear documentation as to the amount of any remuneration to be paid to the trustees.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
6.
Trends and predictions
6.1
How would you describe the current private client landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Turks and Caicos Islands

Answer ... The Turks and Caicos Islands (TCI) offers a small number of licensed and regulated trust companies that are highly skilled in cross-border private client wealth management. The jurisdiction is encouraging of fiduciary and advisory business, and keen to attract reputable institutions and professional firms to establish a presence in the islands. The TCI has much to offer, with an enviable combination of:

  • British overseas territory status;
  • no direct taxation;
  • English legal system;
  • frequent and quick airlift to major international centres in the United States and the United Kingdom;
  • welcoming, business-friendly people and environment; and
  • a favourable regime for residence and remote work.

Whether for the establishment and management of private client structures by competent international service providers, or for part or full-time residence by wealthy individuals and families, or a combination of these, the TCI is well placed to be a country of choice for discerning investors.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
7.
Tips and traps
7.1
What are your top tips for effective private client wealth management in your jurisdiction and what potential sticking points would you highlight?
Turks and Caicos Islands

Answer ... In today’s complex global interconnected marketplace, careful selection of the wealth management team – fiduciaries, professional advisers, investment advisers and asset custodians – is more vital than ever. Jurisdictional distinctions have become less defining, as wealth structures can and should be sited and run on a global basis to meet the client’s particular circumstances. The key element is to identify a reputable, regulated service provider with the network, structuring and transaction experience and capabilities to lead or participate in an effective cross-disciplinary team in multiple jurisdictions.

As in any case, this choice involves:

  • getting to know the people involved;
  • assessing their reputation
  • discerning whether they will serve with the family’s best interests at heart (without the conflicts of interest involved in selling investment products); and
  • determining whether they will be available for the long run without high staff turnover.

Probity is, of course, also paramount.

In the Turks and Caicos Islands, these facilities are readily available from one or more wealth management institutions with extensive cross-border asset management and transaction experience over multiple decades.

For more information about this answer please contact: Christopher Coriat from Coriats Trust Company Limited
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Private Client