Estate planning and asset protection deserve one’s constant attention. Indeed tax solutions are safe only when designed and maintained as a long-term plan rather than a ‘quick tax fix’. Last minute solutions are invariably more difficult to defend against the ever-increasing aggressive tax collecting rules and interpretation. Authorities have the power to actually ‘see through’ the most complex of solutions if and when these are established purely for tax reasons with no economic or reasonable basis.

To ensure the essential element of ‘substance’ is the underlying basis for a structure be it simple or complex, local or international, a review of the client’s existing corporate and personal situations is undertaken, providing a clear picture of the status quo, all relevant details, client priorities and individual circumstances. Such an evaluation should clarify specific current and projected incomes and liabilities, and most importantly the manner in which specific local and international transactions are treated by the client's and solution jurisdiction’s tax regime, so that a comprehensive solution can be put into place on the basis of ascertained tax rules and practice.

The ensuing challenge of achieving asset or resource maximisation and minimal tax liability – is best met by separating income generation from actual ownership which is where the trust becomes the most versatile tool in personal tax planning.

Legal Definition
English law has no statutory definition of a trust, since it has relied on the case law to convert what began as a moral obligation of ‘property care’ into a legal obligation in equity with very particular rights. In time English courts further shaped the nature and regulation of trusts on an ad hoc basis, and this special fiduciary relationship is now well crystallised as an equitable obligation binding a person (who is called a trustee) to deal with property over which he/she has control (which is called the trust property) for the benefit of persons (who are called beneficiaries or cestius que trust), of whom he/she may himself/herself be one, and any one of whom may enforce the obligation (Underhill & Hayton: Law Relating to Trusts and Trustees (14th ed. 1987) p.4)

In essence a trust is created by the Settlor (client can be a natural person or a company), divesting legal ownership of assets or rights into the trust. By the instrument of constitution (trust deed), the guardian or 'trustee' is empowered to hold and administer property in the mode established by the trust deed, and for the benefit of the person or persons specified by the Settlor's letter of wishes as 'beneficiary' (which may include the Settlor).

It is essential for the Client to understand and respect the fact that the legal integrity of a trust is conditional upon the Settlor effectively transferring assets/rights to the trust, relinquishing control, so the trustees may administer according to the trust’s establishment purposes. The trustees should focus on the general policy of income and asset protection, best restrict their role to prudent selection of duly licensed and qualified experts who can offer investment risks and returns according to the original aims of the trust. A trust Deed may itself provide for specific direction or appointment of a specific investment manager or bank. According to the wishes of the settlor, upon which the trust parameters are set out at the onset, the Deed may allow, prohibit or condition the addition of new beneficiaries (e.g., for unborn children) or the exclusion of a specific benefit to certain beneficiaries under conditions clearly stated in the trust deed.

Being a contractual-fiduciary holding of assets, a variety of trusts may be created, to best serve business private or a mixture of both interests: namely

• Bare (or simple) trusts
• Discretionary trusts
• Accumulation and Maintenance trusts
• Protective trusts
• Charitable trusts
• Intellectual Property Trusts

Other forms of trusts which may be used for the creation of a pensions scheme, employee benefit plan and collective investment funds.