TURKS & CAICOS Law and Practice Contributed by: David Stewart, Thomas Bucknall and Gareth Bathgate, Coriats Trust Company Limited
ness framework, including licensing, custody regula - tion, stablecoin provisions, AML/CFT compliance obligations, token issuance rules and a regulatory sandbox. This reflects a policy objective of position - ing TCI as a credible jurisdiction for digital asset and tokenised finance activities. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities Under the modern Trust Ordinance (Chapter 16.12) (the consolidated legislation based on the Trusts Ord - nance 2016, as amended), Turks and Caicos law pro - vides for the full suite of VISTA trusts (those governed by Virgin Islands Special Trusts Act), private trust cor - porations, settlor-controlled trusts, special purpose trusts, revocable trusts, irrevocable trusts, unit trusts, and discretionary trusts. Irrevocable discretionary trusts remain by far the most commonly used vehi - cle in international wealth planning. A trend among some clients from civil law jurisdictions, particularly Latin America, has been a preference for structures incorporating reserved powers, protectors, private trust companies, and other governance features that allow settlors to retain a degree of influence. However, traditional discretionary trusts administered by inde - pendent trustees continue to dominate the market. 3.2 Recognition of Trusts Trusts and trust law are well developed and respected in the Turks and Caicos Islands. The courts rely on English trust law authorities as persuasive precedent, and the judiciary is well versed in trust and fiduciary matters. The Judicial Committee of the Privy Council in London remains the ultimate appellate court, rein - forcing confidence in the jurisdiction’s legal system. 3.3 Taxation of Trusts, Foundations and Similar Entities Located in Other Jurisdictions As the Turks and Caicos Islands does not levy income, capital gains, wealth or inheritance taxes, there are generally no local tax consequences arising from a TCI resident serving as trustee, protector or other fidu - ciary of a foreign trust or similar structure, or from a settlor or beneficiary of such a structure becoming
resident in the Islands. This tax-neutral environment is often attractive in international wealth planning, as changes in TCI residence status do not themselves create additional local taxation. The principal consid - erations are therefore typically the tax and reporting obligations that may arise in other relevant jurisdic - tions rather than in the Turks and Caicos Islands. 3.4 Tax Consequences of Fiduciary and Beneficiary Roles The Turks and Caicos Islands does not impose income tax, capital gains tax, inheritance tax, wealth tax or other direct taxes. Accordingly, no adverse Turks and Caicos tax consequences arise merely because a settlor, beneficiary or donor of a trust or similar struc - ture also acts as a trustee, protector or other fiduciary. Asset protection is a strong driver for settling assets into a Turks and Caicos trust (generally with underlying corporate vehicle). Any creditor would need to allege and prove that any such settlement was undertaken whilst the settlor was, as a result of the transfer or at the time of the transfer, insolvent, and in any event any such claim would be statute barred four years after the date of settlement. 4.2 Succession Planning 4. Family Business Planning 4.1 Asset Protection Trust and corporate structures are commonly used, with family governance charters and supervisory boards to regulate and resolve disputes. 4.3 Transfer of Partial Interest When a partial interest in an entity is transferred, during lifetime or at death, the fair market value of the interest for transfer tax purposes is adjusted to reflect a discount for lack of marketability and control, although the relevant stamp duty charge (as this is the only relevant tax in the Turks and Caicos Islands) heavily depends on the coherence and credibility of the supporting valuation report.
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