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Discussion Starter · #1 ·
I am new to the offshore trust method, but was wondering whether anyone had any further information on this?

As I understand it the offshore trust structure works as long as it is in a relevant jurisdiction. For example Isle of Man provides a good backdrop.

Some of the benefits I've been told are that you can keep 85% ish of gross salary by working with an Isle of Man company. you get paid a portion through PAYE and then the company makes a 'contribution on your behalf' to the trust. The trust then makes a loan to you which is tax free.

There are benefit of kind taxes if no interest rate is added, but if you have an interest rate on the loan, you will pay no benefit of kind tax! Anyone know about this?

Anyway, the best bit is that this loan is never written off (not until you die anyway), but it just remains unpaid. When you die, the beneficiaries of your estate can apply to have the loan cancelled, but not before the full amount is deducted from your IHT allowance - so if your estate is worth £1m, and the loan amount is £200k, your taxable estate is only £800k!!! I know this is weird and not really the best bit (because youre dead), but it seems to make sense?

Any suggestions?
 
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