USES OF MAURITIAN TRUSTS MUHAMMAD UTEEM LLM TEP 1 Mauritius International Financial Services: Onwards & Upwards UTEEM CHAMBERS A Law Firm registered under the Mauritius Law Practitioner’s Act

INTRODUCTION 2  Austin v Bailey (1962)  Trusts Act Qualified Trustee -Protector -Letters of Wishes -Remedies UTEEM CHAMBERS

TAX PLANNING 3  Tax Incentive Trusts: - the settlor : non-resident global business licence holder another tax incentive trust - all beneficiaries: non-resident global business licence holder - purpose trust carried out outside Mauritius UTEEM CHAMBERS

RESIDENT TRUSTS 4  Access to double taxation treaty network  Rate of Taxation: 15%  Deemed foreign tax credit: 80%  Chargeable Income = net income minus aggregate amount distributed to Beneficiaries  Distribution to non resident Beneficiaries is exempt from tax.  Trusts v/s Companies UTEEM CHAMBERS

5  Definition of residency: - trust is administered in Mauritius and - a majority of the trustees are resident in Mauritius; or - the settlor resident in Mauritius at creation of trust  Foreign Trust can be resident in Mauritius UTEEM CHAMBERS RESIDENT TRUSTS

6  Custodian and Managing Trustees  No need to transfer trusts assets into the name of new managing trustees  Comfort factor for settlor  Costs and tax savings UTEEM CHAMBERS RESIDENT TRUSTS

7  0 % tax  declaration of non-residence filed with the Commissioner of Income Tax within 3 months after the expiry of the income year  Use: -Accumulation of Income Trusts. -Special purpose vehicle. UTEEM CHAMBERS NON RESIDENT TRUSTS

ASSETS PROTECTION TRUSTS 8  Trust assets separate from settlor’s assets  Trust not void or voidable by reason of settlor’s bankruptcy or attack by settlor’s creditors  Court may declare trust void if trust made with the intent to defraud creditors of the settlor at the time when trust property vested in trustee.  Action within 2 years from date of transfer to trust  Court will not enforce a foreign judgment in respect of claims of creditors in an insolvency  Must be planned carefully. Federal Trade Commission v Affordable Media LLC and other (the “Anderson case”) UTEEM CHAMBERS

FORCED HEIRSHIP RULE 9  Restrictions on free disposal of property  the transfer or disposition shall not be set aside  foreign judgment in respect of succession rights not enforceable  Planning Tips: - Succession law. Immovable v/s movable assets - Restriction on disclosure of information - Beneficial interest automatically lapses if Beneficiary attacks the trust. UTEEM CHAMBERS

STRUCTURED FINANCE 10 UTEEM CHAMBERS

LARGE NUMBER OF CREDITORS 11 UTEEM CHAMBERS

PENSION TRUSTS 12 UTEEM CHAMBERS

 Thank you for your kind attention. THE END UTEEM CHAMBERS