Sydney, Australia

Default beneficiaries beware – you may have an unexpected tax bill!

By Tony Nunes & Lishi Huang, Kelly + Partners Chartered Accountants

The High Court of Australia's recent decision in Commissioner of Taxation v Carter highlights the risks of being a default beneficiary of an Australian discretionary trust. While a beneficiary can later disclaim their trust entitlement, this case demonstrates that the disclaimer may not be effective for tax purposes.

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Cape Town, South Africa

Domicile diversification: Do not put all your eggs in one basket

By Katy Bolton, Nolands

Let us set the scene: a South African entrepreneur wishes to expand her business into Africa via Mauritius. Her children wish to attend university in the United Kingdom, and thereafter settle in Portugal while her parents have their sights set on retiring in Thailand. How does she best go about achieving these goals?

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Naples, Italy

Taxation of Trusts in Italy: most recent updates

By Dr Antonio Landolfi, Landolfi & Associati

The Italian Tax Agency Circular no. 34/2002 of the 20th of October 2022, has officially clarified a number of historically debated issues in Italy, related to both direct and indirect taxation of Trusts, at the stage of set up, as well as at the distribution of the Trust’s patrimony.

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Artworks with variable taxation in Italy

By Roberto M. Cagnazzo, Three & Partners

Italy does not have a specific regulation for the tax treatment of the sale of artworks, and disputes with the tax authorities often arise regarding the relevance of the disposal and the identification of the correct income category.

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Mumbai, India

Common myths about determinate (non-discretionary) trusts

By Ashishkumar Bairagra

1. A trust, where the shares of the beneficiaries are determined in the trust deed, can only be considered to be a determinate trust.

When the shares of the beneficiaries are determinate, a trust is commonly considered to be “transparent” for tax purposes, and the beneficiaries are liable for tax on their proportionate share of income from the trust. Even if the beneficiaries' shares are determined after the formation of the trust (e.g. by way of contributions in an investment fund by different investors or by way of a resolution passed by the trustees or any other mechanism), the trust can be considered to be a determinate trust.

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Fort Lauderdale, USA

The benefit of dynasty trusts

By Steven Shane, Offit Kurman

Nothing lasts forever. For trusts, there is a somewhat arcane law in the United States called the Rule Against Perpetuities which prevents a trust from lasting “too” long. Many states have abolished their Rule Against Perpetuities laws to permit trusts to have indefinite duration, opening the legal door for dynasty trusts. Combined with: (i) steady increases in the federal estate, gift, and generation-skipping transfer tax exemptions (currently USD 12.06 million per person in 2022); (ii) the scheduled sunsetting of the most recent increase which will cut exemption amounts in half at the end of 2025; and (iii) the looming possibility of tax legislation aiming to curtail common tax planning strategies, wealthy families have been creating “dynastic” trusts that are exempt from transfer taxes and protected from creditors often for multiple generations.

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Tales from the Crypt(o): Estate planning for cryptocurrency

By Kelsey M. Scanlan, Moss & Barnett

Mainstream interest in cryptocurrency has skyrocketed over the last few years. Despite digital currencies plummeting nearly USD 2 trillion in value since peaking in late 2021, the market continues to grow. As of May 2022, one in five Americans has invested, traded, or used cryptocurrencies. An estimated 46.5 million more Americans are expected to invest in cryptocurrencies for the first time this year.

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senior golfers

Private placement life insurance

By Jolene Tan, SingAlliance

As the needs of HNW individuals and families evolve, private placement life insurance (PPLI) has emerged as an effective tool in wealth planning. As its name suggests, it is a sophisticated unit-linked life insurance contract tailored to each client's unique needs.

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London, UK

Information sharing and risk of harm

By Sati Virdee, Citroen Wells Chartered Accountants

The Fifth Money Laundering Directive came into effect in October 2020 and extended the scope of the UK Government’s Trust Registration Service (TRS). This article will focus on one of those changes.

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