Offshore Trusts

[Blik]

Hi forum, a general question if you will. A friend of mine, who has maybe a NAV of about 2 million, wants to open up a Trust account in the Isle of Man, and kick the bulk of this into it. Dis-gregard the reasons...I disagree with them in general, but each to their own. He seems to think that opening up a Trust in the Isle of Man is both a cheap and simple option. My question is thus:

For people with a relatively low NAV is this a cheap and possible options. My very limited understanding of trusts, is that you need a local trustee, who will surely charge an annual fee, and that the trust needs to be audited, which again will cost. And if these costs are in pounds or euros, then surely for Saffas, this is not a good idea.

Any thoughts, suggestions would be appreciated.

[#2]

it depends what he needs the trust for.
For example if he's trying to avoid tax then it that
wont work because its included in the SA net anyways.
If hes trying to do it to take money out of the
country then its fine as with some possible accounts
the costs arent that high, however there are no returns either.
There are 2 hiccups though,
1) You need a local trustee to run it,
if anything happens to your friend (knock on wood) then that
account could take years to wrap up.

2) You generally need a minimum amount to be able to open an
account (hence why few low NAV people open it).
If I remember correctly generally it starts with 60,000 euros
to open but most unit trusts are only available from 400,000 euros.

[Blik]

Cheers, will pass on the info.

[partridge]

2million what ? Rands ?? Your friend needs to consult with a professional who actually understands and is accountable for advice given! This has to be one of the most complex areas of financial planning you can name- made all the more so because of the intention to jettison the "conduit pipe principle" + other estate planning delights( Davis report) Does you friend want the situs of the trust RSA based because if he does do this as suggested he will achieve this by having RSA trustees.....and I will buy you the proverbial beer if that REALLY is what he wants!! I cannot say more and you can guess why.

[Blik]

Many thanks Partridge for the comment - appreciated. I have since found out that he had no idea what he was talking about, and is actually investing in a Pension Unit Trust....it took a bit of teasing out, but I think he liked to throw around the "I have an offshore Trust" type comment! I am going to rib him no end.

[partridge]

Look I like to throw around the fact that my family has a Grand National winner - but I am not so sure that I want to tell anyone I have an offshore trust ?( chuckle)