A trust is established by an individual and is a means whereby property is held by one or more persons (Trustees) for the benefit of another or others (Beneficiaries). In law the Trustees are the owners of the trust property although they not are deal with it as absolute owners. Trusts are very important for tax purposes and several tax saving schemes include them.
International Trusts are controlled by the Cyprus International Trust Law. International trusts are not taxed in Cyprus and benefit from important tax advantages. Below are listed some of those advantages:
- The assets of an international trust are not liable to estate duty in Cyprus
- Gains on the disposal of the assets of an international trust are not liable to capital gains tax in Cyprus
- All overseas income of an International Trust is exempt from tax in Cyprus
- A foreigner who creates an International Trust in Cyprus and retires in Cyprus is still exempt from tax if all the property settled and the income earned is abroad, even if he is a beneficiary.
- Interest, dividends or other income received by a Trust from a Cyprus international business company are not subject either to tax or to withholding tax.