Gary_Trinder

Hey All

Anybody know of financial firms in BC that have experience of (UK - IOM) offshore trust funds? I've read through some of the other forums and found mention of these people Rogers Group & website called financial wisdom forum but would like to get others. I'm not looking for anything illegal, just want to make the money work for me and I've just found out that I'm 1 of a number of people (all UK residents except me) who are beneficiaries of an offshore trust fund due to my uncle who passed away. I spoke to my Canadian (Assante) financial advisor but he is only aware of Candian trusts and I need someone who understands onshore and offshore with my tax implications, etc.

A bit about me: I moved to Lower mainland B.C. in 2010 with my wife and son from Winchester in the UK. We came out here on holiday in 2007 and loved it so decided to move here. We are now Canadian citizens and work and pay taxes as normal. We love it here and will never go back to the UK except for trips to see friends and relatives.

Everything is still going through probate so no rush on this

Cheers
Gary

Steve_

These IOM trust funds were set up to avoid IHT (usually) until HMRC clamped down on them awhile back. There is no IHT in Canada and you've got to do all the foreign trust reporting, plus trust tax is 75% of the income tax rate in Canada so I can't see any point why you'd want to do this. Pull the money out and move it to Canada.

If you put down an IOM trust on a T1135 you're also basically begging to get audited on a regular basis by the CRA. And yet another problem, exchange rate risk, which means not only doing a T3 but converting it into CAD for reporting purposes and having a CGT problem on currency movements.

And if there are multiple non-Canadian beneficiaries of the trust it becomes even more complex.

If you want to get hold of PriceWaterhouseCoopers or KPMG and ask them, go ahead but they'll charge you $10,000 for the answer most likely. They only really care about their own financial fiddles. Your best bet for an answer is whoever the trustee was on the IoM. Canada Life?

Gary_Trinder

Thanks for the response Steve, I see your point. My uncle lived on the Island for 40+ years due to their kind tax laws (no inherritance tax or capital gains) and what worries me is that if I bring the money to Canada that eventually my son will end up losing a big chunk of his inheritance, where as if the money stays on the IOM and I borrow money from it on my death the borrowed money could be repaid from my estate and then my son would be entitled to my share or the trust as laid out in the will.

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Gary_Trinder

Just heard from Rogers Group Financial and they basically said if you invest some money with us we will help you but as you don't go away and good luck. Strange because their website said they offered a free first consultation so I thought I'd get a least a brief conversation via email. I'm happy to pay for the advice and stated that in the email to them, so their response was clearly a we don't know how to help you or you are chicken feed and we're not interested.

Can the person who PM'ed me try again as I didn't have enough posts to receive it, but now I believe I do.

Steve_

You can't avoid taxes that way, you're resident in Canada so the trust is subject to Canadian tax laws, it could be a trust made on the Moon it makes no difference. This is the whole problem, it's a foreign trust under Canadian law which makes the reporting and the payment of tax very complex as I described.

Unless you live on the Isle of Man there's no point to it. If you yank the money out of the trust I assume it will be subject to Manx income taxes so it's important to do it before it becomes "resident" which basically means as soon as it comes into your hands otherwise Canadian taxes will apply, which are probably higher obviously.

If the trustee was your uncle then it essentially expires on the completion of probate anyway, because he's dead. What form of trust is it?

The answer to your question is to talk to someone who is familiar with Manx trusts on the Isle of Man. Because it's such a small place it's not uncommon for heirs to live abroad, they will be the only people who can really help.

How Manx financial law works for residents and non-residents is very different, I suspect the form of trust your uncle set up is not sustainable by a non-resident.

dbd33

Will do.