A unique concept that has been developed over hundreds of years through the English Common law system and adapted in Nevis by its own modern legislation,(Nevis International Exempt Trust Ordinance as amended 1994) trusts are perhaps the most adaptable instrument available for financial planning, asset management and protection.
Trusts have been used in a number of ways to protect and control the use and distribution of family assets and avoid unwanted effects of inappropriate laws of inheritance in the settler’s country of residence or domicile. these are imposed in a settler’s home country.
Nevis International Exempt Trust Ordinance 1994
The Nevis International Exempt Trust Ordinance was passed by the Nevis Island Assembly in 1994. The legislation was established and is a recognized as one of the leading trust legislation coming from offshore jurisdictions. When combined with an IBC, it creates a powerful regime for asset protection and is considered by professional advisors to be one of the best in the world.
Important Provisions of the Trust Ordinance.
Definition of International Trust- A trust qualifies as an "International Trust" and is exempt from all forms of Nevis taxation and exchange controls if it meets the following criteria:
At least one of the trustees is either a trust company doing business in Nevis or a company incorporated under the Corporation Ordinance.
The settlor and beneficiaries are at all times non-residents of Nevis; and
The trust property does not include any land situated in Nevis or the neighbouring island of St. Kitts
An International Trust may have as its proper law the law of Nevis or the law of another jurisdiction. If no proper law is expressed the proper law will be that with which the trust has as closest connection at the time of its creation. Rule Against Perpetuities- The rule against perpetuities does not apply to an International Trust. The maximum duration of an International Trust is 100 years.
The terms of an International Trust may make the interest of a beneficiary subject to termination or diminution in the event the beneficiary becomes insolvent.
The Trust Ordinance defines purposes which shall be regarded as charitable (e.g. the relief of poverty, the advancement for education, the advancement of religion, protection of the environment, advancement of human rights and freedoms) whether they are carried out in Nevis or elsewhere.
The terms of an International Trust may provide for the office of protector of the trust. The protector may also be a settlor, a trustee or a beneficiary. The protector has a fiduciary duty to the beneficiaries of the trust or to the purpose for which the trust was created.
Heirship Rights of the domicile of the settlor may not overrue the provisions of an International Trust.
Subject to the provisions of the Trust Ordinance and to the terms of the trust, a trustee who commits or concurs in a breach of trust is liable for any loss or depreciation in value of the trust property resulting from the breach and any profit which would have accued to the trust had there been no breach.
A creditor seeking to set aside a transfer to an International Trust must establish beyond reasonable doubt that the transfer constituted a fraudulent disposition. The Ordinance expressly states that a trust settled or established or a disposition to the trust shall not be fraudulent as against a creditor or a settlor:
If settlement, establishment or disposition to the trust takes place more than 2 years from the date the creditor's cause of action accrued, or
If the settlement, establishment or disposition takes place before the expiration of two years from the date that the creditor's cause of action accrued; the creditor fails to commence an action before the expiration for 1 year from the date of settlement, establishment or disposition.
Any action to set aside a trust settlement or disposition to an International Trust must be commenced in the High Court of Nevis within two years from the date the trust was settled or the disposition took place.
Bond Requirement- A USD $25,000 bond to secure payment of costs must be placed with the Ministry of Finance in Nevis before a creditor may commence an action or proceeding against property of an International Trust.
Property determined to be community property at the time of transfer to an International Trust retains its character as community property despite its transfer to an International Trust unless the provisions of the trust deed provide otherwise.
The settlor of the trust or trustee of an International Trust can also be a beneficiary.
Trust assets and income derived from the corpus of an International Trust are exempt from all exchange controls and estate, corporate, gift, income, inheritance, withholding, succession and stamp taxes in Nevis.
