MAURITIUS Law and Practice Contributed by: Johanne Hague, Ashwin Mudhoo, Medina Torabally and Yushrah Bayjou, CMS Prism – in association with CMS
Wills A person may decide how their assets will be distrib - uted upon death by way of a Will. The assets will only be vested upon the death of the person, not prior to their death. The procedure for drawing up and execut - ing the Will is fairly straightforward. In Mauritius, there are three types of Will commonly used, namely: • the holographic Will (private deed); • the authentic Will, which is drawn up before a notary in presence of witnesses; and • the secret Will, whereby a sealed envelope is handed to a notary in the presence of witnesses. The Will is deposited with a notary, who becomes the executor of the Will upon death of the testator. At the stage of the opening of the Will, all interested parties will be made aware of its contents. The heirs will be required to sign that they accept the Will and its con - tents. Transfer of property by way of a Will is tax free. Donation Assets can be distributed to heirs or any other person prior to death by way of donation. The donation is akin to a gift and has to be made before a notary by way of a deed of donation. The title to the assets vests in the donee for the lifetime of the donor. Transfer of assets by way of donation is tax free. Trusts Trusts are commonly used for estate planning pur - poses. For a trust to be created, assets can be trans - ferred into the trust by way of a deed of settlement or by way of a Will. The assets will cease to form part of the settlor’s estate after such a transfer. A trustee will be appointed to hold the assets on behalf of the beneficiaries. There is no tax (including (generally) on real estate) upon transfer of assets in the trust. Any distribution of income from a Mauritian trust to its ben - eficiaries will be exempt from income tax in Mauritius. Société Civile A société civile (SC) is another succession planning tool which is often used. In this option, the assets are transferred into a SC which will hold the assets. The shares of the SC are then split up between usufruct
with the other spouse towards the acquisition of such asset. One exception is that property that was acquired by either spouse prior to the marriage will constitute sep - arate property and will not form part of the commu - nity of goods. The “common pool” of assets belongs to both spouses in a state of indivision; on the other hand, all assets that were owned by each spouse are considered as their personal property. A person who wishes to sell any asset forming part of the community of goods would be required to obtain consent from their spouse prior to selling the asset. Regime of Separation of Goods The most important feature of the regime of separa - tion of goods is that each asset owned by the spouses remains their personal property regardless of whether it was acquired before or during the marriage. There is no need to obtain consent from the other spouse when transferring assets under this matrimonial regime. Marriage Settlement Under Notarial Deed This regime is most frequently used for spouses who wish to have specific clauses that will govern their marriage in the form of a contract. The simplest of these contracts will list an inventory of all the premari - tal assets that, in the event of a divorce, will remain the property of their original owner. Whether consent is required prior to transfer of any assets will depend on the clauses set out in the contract. 2.5 Transfer of Property Given that there is no inheritance, succession or capi - tal gains tax in Mauritius, the question of cost basis rarely (if ever) arises. Registration duty or land transfer tax (where applica - ble, although an exemption is typically applicable on transfers to heirs) is applicable on the value of immov - able property at the time of registration, so the ques - tion of cost basis does not arise. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms There are essentially four planning vehicles available for succession. These tools are described below.
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