BAHAMAS Law and Practice Contributed by: Sean Moree KC, Vanessa Smith and Erin Hill, McKinney, Bancroft & Hughes
2.5 Transfer of Property Generally, the transfer of real property in The Bahamas will attract VAT at a rate of 10%. Certain transfers of real property that qualify as an inter vivos gift attract VAT at a rate of 0%. The transfer of real property upon the death of an indi - vidual does not attract tax. 2.6 Transfer of Assets: Vehicle and Planning Mechanisms Companies, trusts and foundations are commonly used for estate planning purposes in The Bahamas. However, the benefits associated with using such vehicles generally do not include tax advantages because of the structure of the various tax regimes in The Bahamas. 2.7 Transfer of Assets: Digital Assets There are no taxes currently in place in The Baha - mas that govern the transfer of digital assets for the purposes of succession. However, the government recently enacted the Digital Assets and Registered Exchanges Act 2024 (the “DARE Act”), which outlines the regulation and management of digital assets. 3. Trusts, Foundations and Similar Entities 3.1 Types of Trusts, Foundations or Similar Entities The types of trusts commonly used in The Bahamas for tax and estate planning purposes are: • asset protection trusts; • charitable trusts; • purpose trusts; and • testamentary trusts. Foundations are also used and recognised in The Bahamas. The Bahamian Trustee Act 1998 was amended in 2016 and 2025, providing for various updates, including: • granting the court the discretion to set aside an exercise of fiduciary power in various instances;
• clarifying the scope of a release that an outgoing trustee could obtain; • extending the protection under a trust instrument concerning the alienation of trust property; and • widening the list of “power holders” who may apply to the court to seek directions relating to a trust instrument. 3.2 Recognition of Trusts Trusts are recognised and respected in The Bahamas; in fact, The Bahamas is regarded as one of the leading trust jurisdictions in the world. The legislative frame - work – including the Trustee Act 1998 (as amended), the Trustee (Choice of Governing Law) Act 1989, the Fraudulent Dispositions Act 1991 and the Purpose Trust Act 2004 – makes The Bahamas one of the lead - ing jurisdictions in the world in terms of trust formation and administration. 3.3 Taxation of Trusts, Foundations and Similar Entities Located in Other Jurisdictions There are generally no adverse Bahamian tax conse - quences arising solely out of a Bahamian citizen or resident serving as a trustee, protector or other fiduci - ary, or as a settlor or beneficiary of a trust, foundation or similar entity established or administered outside The Bahamas. As The Bahamas does not impose per - sonal income tax, capital gains tax, inheritance tax, estate tax or gift tax, distributions from foreign trusts or foundations are not generally taxable in The Baha - mas. However, fiduciaries carrying on regulated trust business remain subject to applicable licensing and regulatory requirements, and transfers of Bahamian real property or other assets into a trust may attract stamp duty, real property tax or other transaction- based charges. In practice, the more significant tax issues usually arise in the foreign jurisdictions con - nected to the trust, its assets or the relevant indi - viduals, including the possible application of foreign trust, anti-avoidance, inheritance or reporting regimes. Accordingly, planning opportunities generally centre on co-ordinating cross-border tax and succession planning, including the timing of migration, trust gov - ernance and compliance with international reporting obligations such as CRS and FATCA, rather than miti - gating Bahamian tax exposure.
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