Gibraltar’s Excluded Property Trust

Gibraltar’s Excluded Property Trust

1024 576 Fiduciary Management

Gibraltar’s Excluded Property Trust


An Excluded Property Trust is brought into being by a valid and legally binding Trust arrangement (“Deed of Settlement”) by which a person, not domiciled in the UK (or UK deemed domicile), is able to protect overseas assets from a future UK Inheritance Tax (IHT) liability should that person become domiciled or deemed domiciled in the UK. At the time of writing a non UK domiciled person will automatically acquire a “deemed domicile” in the UK after 15 years of residence.

Key Points

An EPT is a useful means by which such a person as mentioned is able to protect assets for the purposes of wealth preservation, succession planning and simplification of the process of Probate. Once a non-domiciled person settles assets into an EPT and this is done before they acquire UK deemed domicile, those assets will sit outside that person’s personal Estate and therefore not be included in any calculation of IHT.

Any trust must be settled for the benefit of specific persons or classes of persons and provision can be made in the Trust Document to include not only charities, or other organisations but also future generations of persons as yet unborn. For example: the beneficiaries may be described as “my children, their children and remoter issue”.

For those individuals who wish to provide for the future financial affairs of their children, family members, causes or other persons, they are able to make provision for this knowing their wishes (by means of their Letter of Wishes addressed to the Trustees) will be taken into consideration when a distribution by the Trust is considered.

Once assets are settled into this type of Trust any distribution made will not be seen as a “gift” and so falls outside the 7 Year Rule. In addition, a distribution from a Trust can be made with conditions or other qualifying provisions without falling under the rules governing “Gifts with reservation of benefits”; i.e., where a gift from person to another is given with conditions attached whereby it is considered that the donor is keeping some form of benefit to themselves and making the gift absolutely, it is likely that such a gift will continue to be considered as part of the donor’s estate and in time be included in any IHT calculation.


The Benefits of Considering an Excluded Property Trust Established in Gibraltar

Gibraltar provides a well-regulated and therefore secure jurisdiction in which to establish a Trust. Based upon the common law of England and Wales, Gibraltar trust legislation provides a robust legal framework within which a Trust is established while at the same time, in common with the UK Crown dependencies, UK overseas territories and a number of UK countries within the Commonwealth, allowing for leave to appeal to London and The Privy Council, the ultimate independent court for these jurisdictions in the United kingdom. Recently the Perpetuity Period has been increased to 250 years.

A Trust can be established in a simple and cost effective manner with any future amendments being allowable without the need for complicated and costly legal intervention.


The Benefits of Considering Fiduciary Trust Limited as Trustees

Fiduciary Trust Limited is licensed and regulated by the Gibraltar Financial Services Commission (GFSC) to provide professional trustee services; it is a part of the Fiduciary Group of companies based in Gibraltar. As a licensed and regulated corporate trustee, Fiduciary Trust Limited ensures the highest levels of professional care in providing trust services giving the client the reassurance and comfort that the Trust will be administered year after year and for the benefit of successive generations.

Fiduciary Management

Fiduciary Management

Fiduciary Group was established in Gibraltar in 1982 to provide corporate and trust solutions, and financial services to an international client base. Today we maintain the same high standard of service and have developed our product offering to cater to the needs of our clients by additionally providing Fund Administration, Marine and QROPS services. Our highly qualified Company Managers, Trustees and Accountants have been establishing company formations across the world for over 30 years. At Fiduciary Group we are committed to providing our clients with professional and expert fiduciary services, aiding them in incorporating new companies in a range of global jurisdictions which include Gibraltar itself, the British Virgin Islands and Jersey. Through our range of products we help our clients protect their existing assets and advise them on how to manage these assets for the long term. In this way, we help ensure that our clients preserve their legacy for their future and for the futures of those who depend on them. We are closely affiliated with Gibraltar’s longest established law firm Isolas 1892, specialists in trusts and tax planning, and are fully licensed and regulated by the Gibraltar Financial Services Commission. Our close association with Isolas 1892 ensures our clients access to additional professional expertise, experience, and service based on discretion and trust. Through this affiliation, Fiduciary Group offers clients the benefits of continuity and close personal interest that characterise this long established family practice that has for decades provided local and international clients with expert advice on corporate and trust structures, in addition to comprehensive advisory services in all matters of commercial law and litigation.

All articles by: Fiduciary Management

Leave a Reply