The Isle of Man is a leading offshore jurisdiction for trusts. It offers a  well-regulated, highly professional financial services industry, supported  by a mature legislative framework, in a politically stable environment.  The Isle of Man is a dependency of the British Crown, but is not part of  the United Kingdom or the European Union

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Isle of Man trust law is both well-established and modern. It has generally followed English trust law, having its roots in English common law principles, however legislative developments have been enacted that provide the protections and flexibility expected from a modern offshore jurisdiction.

Isle of Man trusts offer suitable solutions for (amongst other matters):

• Personal and family wealth planning

• Tax planning

• Asset protection

• Orphan ownership structures (e.g., for private trust company structuring or securitisations)

• Employee benefit schemes  

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All trusts require specific advice and tailoring  to the needs of each individual client. The Isle  of Man, with its available professional expertise,  and well-established legal and regulatory regimes, provides an excellent jurisdiction for the establishment of trusts.

Taxation

The Isle of Man tax regime does not impose inheritance taxes, gift taxes or capital gains taxes. Income taxes are not charged to either the trustees or the beneficiaries of an Isle of Man trust managed within the Isle of Man, provided that the beneficiaries are resident outside the Isle of Man, and trust income arises from sources outside the Isle of Man (although there are specific exemptions for certain Isle of Man-source income, e.g., bank interest).

General Information

The Trustee Act 1961 (as amended) forms the  basis of Isle of Man trust legislation. Characteristics of Isle of Man trusts include that:

• They do not need to be registered (unless they  hold Isle of Man real estate or are charitable)

• There is no restriction on the accumulation  of income

• Trustees are accountable to beneficiaries,  however there are no specific statutory accounting or auditing requirements

• Protector(s) may be appointed in order to provide an additional layer of oversight, and to provide comfort to the settlor and/or beneficiaries

• Isle of Man trusts can be of unlimited duration in relation to trust assets settled after June 2015,  or trust assets (whenever settled) where the governing law of the trust is changed to Isle of Man law after June 2015

The Trusts Act 1995 enshrined principles designed to protect Isle of Man trusts from foreign legal claims (e.g., enforcement of forced heirship rights).  A person seeking to bring a claim must do so in the Isle of Man courts, which will decide the matter on the basis of Isle of Man law alone. A foreign court judgement will not be enforced to the extent that that is inconsistent with Isle of Man law, or to the extent that the Isle of Man Court so orders for  the protection of the interests of beneficiaries or  in the interests of proper administration of the trust. However, it should be noted that where trust assets are situated in another jurisdiction, such protections may be of limited efficacy.