‘’At PAHALAW we strive to deliver tailor cut estate planning solutions for tax optimization, asset management and succession law purposes to protect our clients’ hard-earned savings while taking care of the stressful uncertainties of tomorrow ’’. Paris Hadjipanayis, CEO
As a head start, in this article we present you with a list of our ten most essential tips you need to be aware of prior to dealing with your estate planning matters in Cyprus:
- Income, gains and profits generated abroad are tax exempt and do not bear any withholding tax or taxation on redemption of units or interest on dividend payments under a CIT or AIF structure for foreign investors or non-Cyprus tax residents;
- Profits generated by the disposal of shares, securities, dividends received, capital gains from the sale of shares / property companies abroad are tax free under an AIF set up;
- As of 2015 there is a Notional Interest Deduction for taxable profits on new equity held by the company (AIF) with a restriction of a 10 year bond yield +3%;
- Full confidentiality and protection of anonymity for CIT’s class of beneficiaries and AIF’s unit holders;
- An AIF umbrella structure can segregate its funds by allocating equity in multiple sub-funds and the respective unit holders of each sub fund will enjoy protection from any type of civil liability and creditor claims stemming out of a cross sub-fund (ring fencing of assets);
- CITs may be also used for tax optimization purposes on worldwide assets and tax avoidance on foreign chargeable gains and be treated as exempted property for UK non-domiciles on an income, capital gains and inheritance tax basis that would otherwise be taxed on the arising basis of taxation by the HMRC in the UK post 06/04/2017;
- Any type of investment via the setting up of a CIT or AIF of €2,000,000 will qualify for acquiring a Cyprus passport and gain access to EU market under a dual passport regime; A Permanent Residence Permit will allow you to change your tax residence to Cyprus upon purchasing a €350,000 estate and use it as your domicile of choice;
- By setting up a CIT the settlor can avoid the “per stripe” formula distribution rule for non-disposable assets for family members up to the third degree of lineage.
- By contrast to drafting a Will which can be negated at any time during your lifespan when acquiring new assets or when a legal hair is born / added to the line of succession, a CIT will remain in force for an indefinite period of time regardless of such changes and serve your beneficiaries’ interests.
- Failure to plan your estate matters on time will always lead to a probate action taking place in court which will inevitably increase running costs as well as create a delay of up to 5 years for completion.
For more information please contact Mr. Paris Hadjipanayis via e-mail at [email protected] and get a free fee quote upon filling in our dedicated estate planning questionnaire.