The income of a trust created by a non-resident of Gibraltar is exempt from Gibraltar tax even where, as is usually the case, the trustees are resident in Gibraltar. In order to achieve this the trust deed must not permit a Gibraltarian or resident of Gibraltar to be a beneficiary.
There are no requirements at present for the Gibraltar authorities to be informed of the existence of a trust and the fact that the beneficiaries are not resident. This does not apply to Asset Protection Trusts
Gibraltar trusts cannot avoid withholding taxes deducted from dividends paid to them by companies.
If income is distributed at the trustees' discretion to beneficiaries or if beneficiaries are entitled to income under the terms of a fixed interest trust, the beneficiaries may be able to claim repayment of tax under the terms of a double taxation agreement between their country of residence and the country from which the distributed income arose. However, professional advice should be taken by a beneficiary who receives a distribution from a trust on his personal tax obligations.
All trusts created by non-residents of Gibraltar which do not have Gibraltarians or residents of Gibraltar as beneficiaries do not pay stamp duty on the transfer of assets by them to beneficiaries although stamp duty is payable if it relates to the transfer of real property in Gibraltar. No probate duty is charged on trust assets. Capital gains tax does not exist in Gibraltar.
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.