International Tax Changes

I am constantly intrigued with the tax changes in other jurisdictions around the world. As a member of the Society of Trust and estate Lawyers we see a number of administrations that cross international borders including trusts controlled by resident Australian taxpayers.

Take a look at some of the recent changes of disclosure in member countries to the Hague Conventions on tax and succession.

FRANCE: Public access to trusts register is provisionally suspended pending hearing on privacy challenge

France’s Conseil d’Etat has suspended the public’s recently created right to view the online register of trusts that have connections with France, pending a full hearing at the constitutional court (CC). The CC is to determine whether public access to the register is a proportional measure under the French constitution. The case results from the appeal of an American citizen who claims that this register runs counter to the right to privacy. On 27 June STEP stated its opposition to public access to the trust register, noting that the data was supplied for tax purposes in good faith, and with no permission for it to be made public.

SWISS BANKING: UBS clients withdraw funds as end of secrecy approaches

Clients based in emerging markets, especially Latin America, have withdrawn CHF2.3 billion (approximately USD2.4 billion) from UBS bank accounts, according to press coverage of the Swiss bank’s most recent quarterly report. The bank’s management expects the outflows to continue for the rest of 2016 and into 2017 as emerging market countries implement voluntary disclosure programmes in anticipation of the full implementation of the OECD’s automatic exchange of information.

JERSEY: Trust law soon to be amended again

An expert at international law firm Ogier examines potential changes to Jersey’s trust law currently in the pipeline. A recently completed consultation centred on amendments clarifying that there is no need for the trust to have a beneficiary at all times during its existence; the rights of beneficiaries to information in respect of the trust; reservation of powers by a settlor; arbitration; retrospective approval of self-contracting by trustees; extended indemnity provisions for departing trustees; accumulation and retention of income in trusts; power of the Royal Court to vary a trust; and others.

MAURITIUS: Ultra-wealthy investors to be granted five-year ‘tax holiday’

Mauritius’ 2016–2017 budget introduces several reforms intended to boost its financial services industry. Foreign ultra-high-net-worth individuals investing a minimum of USD25 million in Mauritius will be granted a five-year tax holiday, as will licenced overseas family corporations, licenced asset and fund managers managing a minimum asset base of USD100 million, and international law firms issued with a global legal advisory services licence – to that effect, a limited liability partnership bill will also be introduced.

CANADA: Consultation on draft tax legislation

Draft legislation has been published implementing the important tax changes announced in Canada’s 2016 federal budget. They include proposals concerning multiplication of the small business deduction, avoidance of the business limit and taxable capital limit, country-by-country reporting and the Common Reporting Standard penalty.

US: FinCEN extends customer identification rules for real estate agents

The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has extended its ‘temporary’ orders requiring US title insurance companies to identify the natural persons behind shell companies used to pay ‘all cash’ for high-end residential real estate in six major metropolitan areas. Similar ‘geographic targeting orders’ are already in place for Manhattan and Dade County in Miami, two of the US’ prime property areas. ‘All-cash’ does not mean actual banknotes but rather the purchase of property not funded by a loan.

NEW ZEALAND: Guidance on Common Reporting Standard for automatic information exchange

New Zealand’s Inland Revenue Department (IRD) has published guidance for financial institutions on the upcoming automatic exchange of financial information, based on feedback from a recent consultation. Draft legislation will be introduced in August.

If you have any questions regarding assets located overseas in terms of your trust and estate planning, please give us a call. Regards Tony