Maltese trusts have become invariably popular with international clients due to the exceptional reputation that Malta has garnered as an international financial services centre, coupled with an excellent tax regime applicable to trusts.
From a fiscal perspective, trusts having non-Maltese resident beneficiaries are automatically treated as transparent for tax purposes.
This enables any foreign sourced income received by the trust not to be taxable in Malta, since it would be deemed to be received by the non-resident beneficiaries. Provided the Maltese trust is not an owner of immovable property in Malta, any gains arising from transfers of beneficial interests in Maltese trusts would be also exempt from tax on capital gains in the hands of the beneficiaries.
The Maltese trust has also an option to be treated for tax purposes as a company, and hence it could be eligible to benefit from Malta’s treaty network and its beneficiaries could also claim the beneficial tax refunds contemplated under Maltese law.
• Possibility of tax neutrality with correct structuring
• Trust may opt to be treated as a company for tax purposes
• Solid legislation requiring, inter alia, trustees to be licensed persons.