Belize Trust Overview

 

The trust, like the IBC, is a proven and effective tax planning vehicle which can be used for a range of activities such as asset protection, estate planning, investment holding and financial management. The trust allows the legal ownership or property to be distinguished and separately vested from the enforceable rights of use and enjoyment of that property.

 

Legal Nature/Purpose/Type of Law

 

The Trusts Act 1992 ("The Act") provides for the creation and recognition of trusts under Belize law. For a trust to make use of the legislation in Belize it must meet the criteria to be termed an "exempt trust". To qualify under this definition, the trust property of the trust must not include any immovable property within Belize and the settlor and beneficiaries cannot be resident within Belize. The trust may have a connection with Belize through a Belize trustee company. The maximum period of a Belize trust is 120 years. The Act modifies the common law rules relating to the rules against: accumulations, perpetuities, double possibilities, restricting the extent of charitable purposes and purpose trusts. Trusts are created either by oral declaration, instrument in writing (including a will or codicil), by conduct, operation of law or in any other manner whatsoever. No formalities or technical expression is required to create a trust as long as the intention of the settlor is clearly manifested.

 

Charitable and Purpose Trusts

 

Specific provision is made for the settlement of charitable trusts as long as the charitable purpose is for the relief of poverty, advancement of education, religion, environment, human rights or for community benefit. General purpose trusts are allowed where the purpose is specific, reasonable, capable of fulfillment, not immoral, unlawful or contrary to public policy and the terms of the trust provide for the appointment of a protector who will enforce the trust.

 

Taxation of a Belize Trust

 

Trusts are completely tax free in Belize as long as the settlor or any of the beneficiaries are not resident in Belize and the trust property does not include any immovable property situated in Belize.

 

Exclusion from Foreign Judgments

 

Foreign judgments are not enforceable against a trust. Under Belize law, the claimant must commence new proceedings in Belize and be subject to Belize law thus involving extra inconvenience and cost. A trust governed by Belize law or disposition of property held by the trust will not be void, liable to be set aside or defective by reason that the laws of any foreign jurisdiction prohibit or do not recognize the concept of a trust or that the laws of Belize are inconsistent with any foreign law. A Belize or any other court may not vary or set aside or recognize the validity of a claim against trust property in respect of the personal and proprietary consequences of marriage or the termination of marriage.

 

Filing requirements

 

A trust has to be registered in Belize with trust agent affidavit and application form. The Register is not open for inspection except when the trustee of a trust (in writing) authorizes a person to inspect the entry of that trust on the Register.

 

Audit requirements

 

There is no annual audit requirement for the trust.

 

Tax Treaties

 

Belize has concluded double taxation agreements with many countries. The terms of the agreements vary from country to country.

 

Disclosures

 

Other than the existence of the trust Register often the only person with access to information about a trust will be the trustee. Through common law the trustee can be found to be in breach of trust and under the Act this carries stiff penalty.

 

Please contact us if you need more information on Belize Trusts and related services