Amendment Of The Cyprus International Trusts Law
Last week a new Law amending the Cyprus International Trusts Law was introduced. The Law has been published in the Gazette and came into force today, Friday 23 of March 2012.
The new Law builds on the existing very attractive Cyprus International Trusts Law and has introduced many new features. The most important of these new features are summarised below:
- The settlor and the beneficiaries or any of them of a Cyprus International Trust ("CIT") may become resident in Cyprus.
- All questions in relation to a CIT will be governed by Cyprus Law and Cyprus Courts will have jurisdiction.
- The principle of settlor reservation of powers is greatly enlarged and is being codified in the new Law. The settlor of a CIT may retain or vest in the protector or enforcer of a CIT very wide powers including powers in respect of revocation or amendment of the CIT, distribution, sale, transfer disposal or charge of the trust property and substitution of the trustees. These and other of the powers expressly provided in the new Law, allow the settlor (or the protector of a CIT) to exercise a greater degree of control over the administration of the CIT.
- Real Estate situated to Cyprus may be the subject matter of the CIT.
- The new Law applies to new and existing CITs.
The new Law, which became effective upon its publication in the Gazette, enhances the position of Cyprus as one of the most attractive jurisdictions worldwide to set up and operate an International Trust.
Tax Status
Cyprus tax resident beneficiaries to a CIT are subject to taxation in Cyprus on the worldwide income and profits generated by the CIT.
Non-Cyprus tax resident beneficiaries are subject to taxation in Cyprus only on Cyprus-sourced income and profits generated by the CIT, where applicable by the tax legislation.
Way forward: how PwC can help you
Our teams are ready to discuss the above developments with you and offer our support.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.