The use of international trusts is becoming ever more popular for several reasons. Malta has rapidly earned a reputation as an ideal location from which to establish and manage both private and commercial trusts. This is no doubt, a testament to Malta’s growing reputation as a serious and well-regulated administration within the EU. The Malta trust offers flexibility, security and confidentiality as well as a significant pool of professional accountants, lawyers, financial managers and administrators who can ensure that any trust property settled to a Malta based trust are handled in an appropriate manner and in the best interests of the beneficiaries.
Trusts in Malta are regulated by the Trusts & Trustee Act, 2004 and draws heavily on trust concepts derived from UK law. Malta Trusts are however more flexible and far more simplified, making Malta an attractive and more up-to date alternative than other, more traditional trust jurisdictions. Malta Trusts, for instance, permit the holding of any property for any person irrespective of nationality or residence. The added levels of flexibility and the over-riding, elemental principle to protect beneficiaries lend themselves particularly well to various applications. Trusts are not available over the counter but are customised to provide solutions for various scenarios. Malta trusts have been found to be particularly adapt as solutions certain commercial applications such as unit trusts, collective investment schemes and securitisation. The Trust & Trustees Act also interacts very well with other related laws particularly the Income Tax Act. Income earned by the application of trust assets is not taxable in the hands of a trustee but only falls to be taxed in the hands of a beneficiary upon distribution. However, the Income Tax Act specifically exempts from tax any income arising outside Malta when earned by a person who is not resident in Malta.
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