The concept of a trust is recognized by Barbados law, as Barbados law is based on English common law and equity. The law regarding trusts is supplemented by the Barbados Trustee Act and the International Trusts Act. The International Financial Services Act also regulates the issue of licences to Barbados companies acting as trustees of offshore trusts in Barbados, defines types of offshore trusts and regulates the powers and duties of a trustee of an offshore trust.
Any person whether a resident of Barbados or not, may settle assets in a Barbados trust. A trust is established by the execution of a trust instrument in writing and the transfer of the assets to the trustee. The trust instrument can be executed without naming the settlor. A trust can be either a fixed or discretionary trust, and a protector can be appointed in the trust instrument to supervise the activities of the trustee. The International Trusts Act Cap 245 of 1995 allows trusts to be created by non-residents for the benefit of non-residents. The fee for an International Trust is $1100.00. Payment must be made by cheque to the (International Business Division), Ministry of Industry, International Business, Commerce and Small Business Development, drawn on a local bank account. No exceptions in this regard will be entertained. There are no minimum capital requirements for Barbados Trusts and they can be either of fixed interest or discretionary. An International Trust is taxed at the same rates as individuals, but without provision for personal allowances and deductions: Individuals who earn less than Bds$18,000 from employment per annum enjoy the benefit of a “reverse tax credit”, a grant of Bds$1,300 in each year. However this amount will be reduced to $650 for the 2013 income year. Other individuals are entitled to a personal allowance of Bds$25,000 per annum while pensioners aged 60 and over are also entitled to a personal allowance of Bds$40,000. The tax rates applicable to individuals with effect from income year 2013 are as follows:
|$35,000 or less||
|more than $35,000||
From September 1, 2013 a Consolidated Tax was introduced and levied on the gross incomes of individuals on amounts of $50,000 and above as follows:
|$50,000 to $75,000||
|$75,001 to $100,000||
|$100,001 to $200,000||
|$200,001 and over||
– There are no capital gains, inheritance, gift or estate taxes levied in Barbados.
– There are no capital requirements. Resident and non-resident individuals may act as a trustee. Only international banks may act as trust corporations. At least one resident trustee is required.
– Trustees need not register the beneficiaries of the trust. Banks opening a trust account need not know the names of the beneficiaries if a known trust corporation opens the account.
– Trusts may migrate in and out of Barbados.
– If the settler and beneficiaries are non-residents and the trust property does not include immovable property in Barbados, the trust and beneficiaries are exempt from all taxes.
– The legislation contains provisions for the non-recognition of foreign judgements and inheritance laws. The legislation also provides for ‘asset protection’. Instant immunity is granted from creditors’ claims.
The International Trusts Act enhances the law concerning the use of Barbados trusts by non-residents. An international trust must meet the following criteria:
– the trust deed must specify that the International Trusts Act applies;
– at least one trustee must be a resident of Barbados;
– the settlor and the beneficiaries must be non-residents of Barbados; and
– the assets of the trusts cannot include Barbados real estate.