Formation & Management of Trusts
Trusts in Malta are regulated by the Trusts & Trustee Act, 2004.
In Malta the taxation of trusts is a comprehensive issue particularly due to the fact that the ‘trust’ is not an entity but a relationship. The tax treatment is dependent on a number of factors including the nature of the trust income and the residency of the beneficiar-ies in question.
As a general rule, the Malta Income Tax Act specifies that where at least one of the trustees of a trust is a person resident in Malta, tax shall be payable on any income attributable to a trust. Malta tax legislation de-fines “income attributable to a trust” as the
The advantage of settling a trust in Malta include:
- favourable taxation in certain circumstances,
- confidentiality,
- control of assets,
Formation
Trusts must be created in writing, either by will, by unilateral declaration of trust or other written instrument. A unilateral declaration of trust is made by a licened trustee (Corporate Services Limited) and containing all the terms of the trust as well as information enabling the identification of the beneficiaries.
The trust instrument is a private writing and is not registered, it is a highly confidential document and no person may be ordered to divulge to any authority (including any court) any matter relating to a trust unless under certain exceptional circumstances.
Confidentiality
Under the Professional Secrecy Act 1994, lawyers, bankers, stock brokers and accountants cannot divulge any information about their clients unless international criminal activity (money laundering, drug dealing, etc.) is involved.
Moreover, Licensed Trustees such as Corporate Services Limited, fall under the Malta Financial Services Centre Act 1988 which also requires such companies to protect the confidentiality of the beneficial owners they represent.