BAHAMAS Law and Practice Contributed by: Sharmon Y. Ingraham, Higgs & Johnson
6.2 Tax and Regulatory Constraints When considering succession planning techniques, there are no anti-avoidance rules, estate or income tax rules in The Bahamas that would influence the avail- ability or desirability of one mechanism over another. However, The Bahamas has adopted various tax infor- mation exchange agreements, and enacted legislation to facilitate reporting under the Common Reporting Standard and the US Foreign Account Tax Compli- ance Act. As such, The Bahamas is required to pro- vide applicable disclosure and reporting in accord- ance with the obligations it has assumed. Recent legislative changes concerning the transfer into trusts of Bahamian real property, which limit and/ or restrict exemptions on such transfers, has impact- ed, to an extent, the desirability of holding such assets in trust structures. Depending on the family’s objec- tive, the change in legislation has resulted in other mechanisms being adopted in preference to the trust, like incorporated vehicles or wills. While the Digital Assets and Registered Exchanges Act, 2024 has been enacted and replaces the original Digital Assets and Registered Exchanges Act, 2020, the legislation is focused primarily on the regulation of the sector. As such, the legislation does not spe- cifically address the disposition of digital assets like email accounts, social media accounts and cryptocur- rency at the individual level. The disposition of such assets, together with access information, remain top- ics for discussion and specific instruction in the initial phases to prepare succession and estate planning documents. 7.2 Planning Considerations Details regarding the digital assets held, and how such assets are held and accessed, should be specifically considered in the initial planning stage. A joint plan should be agreed with the client-owner to address the particular asset and the intended disposition or transfer, and the plan should communicate necessary access information. 7. Succession of Digital Assets 7.1 Legal Framework
ing Law) Act, Chapter 170, Statute Law of The Baha- mas, as applicable. Lifetime transfers, which result in a change of owner- ship, would likely attract transfer taxes while transfers to surviving spouses, arising through the probate pro- cess, are not subject to estate or inheritance taxes. 4.2 Prenuptial and Postnuptial Agreements While there is presently no legislation in The Bahamas that recognises and enforces nuptial agreements, M v F [2011] 2 BHS J. No 13, relying on English case law, held that prenuptial and postnuptial agreements may be considered in the exercise of the court’s discretion- ary jurisdiction contained in the Matrimonial Causes Act, Chapter 125, Statute Law of The Bahamas. 5. Tax Treatment of Lifetime Transfers and Testamentary Dispositions 5.1 Lifetime Transfers There are no gift taxes and no capital gains taxes applicable in The Bahamas. In the context of lifetime dispositions, transfer taxes arise where such dispo- sitions result in a change of beneficial ownership. Recent legislative changes brought into force in 2024 removed certain tax exemptions in respect of trusts established enabling the transfer of Bahamian real property among the lineal descendants of a settlor/ owner. 5.2 Testamentary Dispositions There are no estate taxes or inheritance taxes assessed in The Bahamas on the disposition of assets out of a deceased person’s estate.
6. Lifetime Succession Planning Mechanisms 6.1 Common Planning Techniques
Common succession planning mechanisms used in The Bahamas to transfer wealth include the creation of trusts, foundations, family entities and wills.
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