Estate Planning

Going Offshore: It's not just the weather

By Hull & Hull LLP

An interesting excerpt from Diane Francis’s new book Who Owns Canada Now? was published in Saturday’s National Post and touches in some detail on offshore trusts as a mechanism to avoid Canadian taxes.

Aside from briefly lamenting my non-mention in a book chronicling Canada’s wealthiest, I was struck by the contradiction in the apparent approaches of different wealthy Canadians to the opportunity to avoid taxes. According to Ms. Francis, one common tax avoidance mechanism involves settling assets in an offshore trust, apparently becoming a fairly common option for the wealthy. It seems to require spending six months of the year out of the country, something I doubt many Canadians would baulk at after the dreadful winter we’ve just suffered through.

What really struck me about the article were the quotes from wealthy Canadians who refuse to avail themselves of this option on the basis that as Canadian citizens who became wealthy in Canada, they should pay Canadian taxes and not shelter assets.

Here’s hoping I face this touchy dilemma myself – the sooner the better!

At any rate, an interesting article offering a good précis of both sides of the issue and much food for thought.

It will be even more interesting if these trusts begin to be litigated. Certainly English jurisprudence seems to deal with them often, if only because the Judicial Committee of the Privy Council continues to take appeal cases from the Courts of former British colonies.

Thanks for reading.

Sean Graham

Full post as published by Toronto Estate Law Blog on April 14, 2008 (boomark / email).