BARBADOS

2. Sources Of Law

A. Trust Creation And Administration

The law of trusts in Barbados has its foundation in the English Trustee Act 1925 (TA), in common law, and in rules of equity. The general principles relating to trusts are supplemented by the Barbados Trustee Act and International Trusts Act (ITA). The International Financial Services Act 2002-5 (IFSA) also regulates licensees acting as trustees of 'offshore trusts' in Barbados, and regulates the powers and duties of the licensee as trustee. Barbados has developed a legal infrastructure with accounting expertise to strengthen the proper establishment and administration of trusts.

B. Property, Estate And Probate

A Barbados trust provides for distributions at any time during the lifetime and upon the death of the settlor. It can provide most of the benefits of a will without requirements of probate and court approval for distribution of assets to beneficiaries. Law dictates that unquestioned legal title vests in the beneficiaries to the property of the trust.

A trust that takes effect only upon the death of the settlor must be declared as prescribed by the Succession Act 1981, since it is essentially a will and is therefore subject to probate. Further, the Property Act 1979 requires that for dispositions of real property, the instrument must be in writing.

C. Taxation

The governing tax regime will depend on the type of trust and the tax planning it strives to achieve. Barbados has no capital gains tax or estate duty. Any distribution of capital gain to a trust beneficiary will not be subject to tax in Barbados.


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© 2012 Society of Trust & Estate Practitioners