CYPRUS INTERNATIONAL TRUST

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The Cyprus International Trust is an ideal structure for asset protection and estate planning at the maximum tax efficiency. Cyprus through the implementation of the new Cyprus International Trust law is now rightfully on the 1st rank of International Trust Jurisdictions.

Oxford ensures that its Clients can effectively take advantage of the Cyprus International Trust and utilise all the benefits with respect to their assets, inheritance or for any other purpose the Cyprus International Trust can offer.

 
 

 

Cyprus International Trusts are created for numerous reasons, including:

  • Effectively reduce tax liabilities;
  • Adjust the devolution of assets on death;
  • Avoid the inconvenience, delays and publicity of probate;
  • Protect assets from actual or potential creditors.

Under the Cyprus International Trust Law (as amended), a trust will qualify as a Cyprus International Trust if:

  • The settlor and/or a beneficiary were not Cyprus tax residents in the year preceding the year of creation of the trust;
  • At least one of the Trustees is a permanent resident of Cyprus.

TAX ASPECTS OF CYPRUS INTERNATIONAL TRUSTS

The Cyprus International Trusts enjoy significant tax advantages, providing the essential tax planning opportunities to interested parties. We analyze below the most important tax advantages available for tax optimization of Cyprus International Trusts:

INCOME

All income of a Cyprus International Trust is tax free in Cyprus.

CAPITAL GAINS

No Capital gains tax on gains from the disposal of assets of a Cyprus International Trust.

DIVIDENDS - INTEREST

No withholding tax on dividend, interest, royalties or other income received by a Cyprus International Trust from a Cyprus Company.

ESTATE DUTY

There will be no estate duty in Cyprus over a Cyprus International Trust established for estate duty planning purposes.

OTHER BENEFITS OF CYPRUS INTERNATIONAL TRUSTS

  • All matters and disputes relating to Cyprus International Trust will be determined by the laws of Cyprus without reference to the law of any other jurisdiction. This affords legal certainty and a reliable dispute resolution forum;
  • An international trust containing a choice of law clause in favour of Cyprus law is fully protected from unfounded foreign judicial claims as a matter of public policy and order; 
  • The settlor maintains extensive reserved powers over the trust. The trust may also state that the trustees’ powers are exercisable only with the consent of the settlor or any other person specified in the terms of the trust;
  • The settlor and the beneficiaries or any of them may become resident in Cyprus;
  • There is no limit on the duration period for which a trust may continue to be valid;
  • Trustees maintain the same investment powers as those of an absolute owner, allowing them to invest in a broader range of investments for the best interests of the beneficiaries; 
  • The trustee may invest in movable and immovable property both in Cyprus and overseas, including shares in companies incorporated in Cyprus.

For more detailed analysis in respect to Cyprus International Trusts you may also download our Fact Sheet No. 6 – CYPRUS INTERNATIONAL TRUSTS. 

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