BAHAMAS Law and Practice Contributed by: Sharmon Y. Ingraham, Higgs & Johnson
tive Entities) Regulations 2025 enable the creation of private trust companies and permit such trust companies to be exempt from certain requirements imposed upon professional corporate trustees by the provisions of the Banks and Trust Companies Regula- tions Act, 2020. 10.2 Taxation of Trusts Generally, in light of the tax structure utilised in The Bahamas, other than the imposition of trust duty of BSD50.00 on the creation of a trust, trusts as a vehicle for the transfer of wealth, estate and family planning are not subject to taxation in The Bahamas. The sett- lor and beneficiaries of trusts existing under the law of The Bahamas are also not subject to direct taxa- tion in The Bahamas. However, to the extent that a trust administered in The Bahamas has Bahamian real property as a component of the trust fund, real prop- erty taxes are assessed annually on such property, factoring into the assessment the value of the prop- erty and improvements thereto. Similarly, where such trust has an operating business entity licensed under the Business License Act, business licence taxes are assessed on the turnover. 11. Planning for Non-Traditional Families 11.1 Succession Rights and Estate Taxes for Non-Traditional Families Following the enactment of the Status of Children Act, Chapter 130, Statute Law of The Bahamas, in 2002, all children – whether born in wedlock, out of wedlock, legitimated or adopted – were given equal status under the law. Consequently, all children were accorded equal entitlement to benefit in their parents’ estate. While the Status of Children Act does not specifi- cally address surrogate children and posthumously conceived children, it is arguable, on the express lan- guage of the legislation, that such children should be subject to the equality principal extended to children generally. Where a deceased person has created a valid will and made specific dispositions in its provisions, recog-
nising the testamentary freedom, the law does not superimpose any conditions or requirements on the gifts and dispositions specified in such will. Similarly, where a trust instrument is prepared that addresses non-traditional family aspects and succession entitle- ments, which does not require beneficial entitlement provisions to be construed in accordance with Baha- mian law, such provisions would not be disturbed. There is no legislation in The Bahamas that recognises same-sex spouses or civil partnerships, and under the current laws in The Bahamas, “spouse” is convention- ally defined as the husband or wife of a person. A mar- ital relationship may arise legally in accordance with the provisions of the Marriage Act, Chapter 120, Stat- ute Law of The Bahamas. A marital relationship may also arise from an extended cohabitation of a man and woman in a reputed relationship of husband and wife, which receives recognition following any adjudi- cation by the courts of The Bahamas that a reputed relationship of husband and wife should be presumed and they are the spouse of each other, subject to any evidence to the contrary. Persons falling within the scope of “spouse”, as conventionally defined, would be within scope of the various succession provisions available under the law of The Bahamas as discussed in this chapter. 11.2 Conflicts and Divergent Laws Conflicts can arise where family relationships are recognised differently under the law of other juris- dictions. Considering the conventional construction of “marriage” and/or “spouse” under the law of The Bahamas, this area is one that could attract significant conflict given the recognition of same-sex relation- ships in other jurisdictions. Such areas of conflict may be avoided in the draft- ing of definition provisions in documents adopting an estate planning mechanism. For example, in the prep- aration of trust instruments governed by the law of The Bahamas, this potential conflict is often addressed by specifying that the marriage is in accordance with the law where the beneficiaries are resident and/or domiciled. Similarly, conflict may arise concerning surrogate chil- dren. In the trust preparation, special care in delin-
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