Cyprus International Trust (CIT)
For a valid CIT to be created, the following three certainties must be present:
- Certainty of intention – there must be evidence of the express intention of the settlor to create the trust. This is usually evidenced by the trust instrument and letter of wishes by the Settlor;
- Certainty of subject matter – the assets that are to become the trust property must be readily identifiable, i.e. money, property, shares etc. Additional assets may be added to the CIT after its creation;
- Certainty of objects – the identity of all intended beneficiaries of the trust must be ascertained at the time of setting up the trust;
- The Settlor is not a tax resident in Cyprus during the calendar year preceding the year of creation of the trust;
- At least of the Trustees from time to time is a tax resident in Cyprus during the trust period;
- None of the beneficiaries are tax residents in Cyprus during the calendar year preceding the year of creation of the trust.
A Cyprus International Trust has many tax and other benefits, some of which are:
- Income, gains and profits from non- Cyprus sources, where the beneficiary is not tax resident in Cyprus, are exempt from income tax, capital gains tax, special defense contribution or any other taxes in Cyprus.
- Worldwide income, profit and gains are taxable in Cyprus only where the beneficiary is a Cyprus tax resident.
- Where the beneficiary is not tax resident of Cyprus, the income and profits of a CIT are taxed in Cyprus only if they earned from sources within Cyprus.
- Dividends, interest or royalties received by a CIT from a Cyprus international business company are not taxable and not subject to any withholding tax.
- There is no estate duty or inheritance tax in Cyprus.
- The CIT may be used to distribute untaxed income in Cyprus to the beneficiaries, that is to say, family members.
- A CIT may be used to protect assets from risks arising from legal claims against the Settlor. Types of claims may include negligence, breach of contract, and claims of spouses or former spouses, expropriation, breach of statutory and so on.
Our team of professionals possess the expertise and in-depth knowledge of the relevant legislation and procedures to help you address all issues and we undertake to guide you and provide a complete support throughout the process.