An increasing number of high-net-worth individuals (HNWIs) in the United States of America are using offshore structures to safeguard their wealth.
In today’s complex global landscape this shift is a calculated move to protect assets. This strategy is considered prudent given clients’ perceptions of heightened instability in the domestic political environment.
By placing a portion of their wealth in stable, low-risk, international jurisdictions, individuals create an insulating layer of protection. Advantages include:
- Asset Protection: Offshore jurisdictions often have compelling legal safeguards that shield assets from civil judgments, creditor claims, and political interference.
- Jurisdictional diversification: Holding assets across multiple jurisdictions reduces exposure to any single country’s legal, political, or economic risks.
- Privacy and confidentiality: While full transparency to tax authorities is required, many offshore jurisdictions maintain strict confidentiality protections that guard client information from public disclosure or misuse.
- Estate planning and succession: Offshore structures provide long-term succession planning, allowing wealth to pass efficiently and securely to future generations.
- Stability: Jurisdictions such as the Isle of Man are known for political neutrality, financial regulation, and legal integrity, offering an ideal environment for long-term wealth preservation.
It is important to note that relocating assets abroad does not exempt U.S. citizens from their tax responsibilities. The United States taxes its citizens and residents on their worldwide income, regardless of the location of the income or the physical residence of the individual. As such, proper compliance with reporting requirements and foreign asset disclosure obligations remain essential.
Why the Isle of Man?
The Isle of Man is a leading destination for offshore wealth structuring. As a self-governing British Crown Dependency, it offers a politically stable environment with a well-developed legal system and a highly respected financial services sector.
Key benefits of using the Isle of Man include:
- A long-standing reputation for investor protection and regulatory integrity
- Modern trust legislation tailored for international clients that includes firewalls to prevent the enforcement of foreign court orders
- Strict confidentiality provisions backed by law
- A responsive legal system familiar with international structures
- No capital gains tax, inheritance tax, or wealth tax at a local level.
Known for its Celtic and Viking heritage it is home to the oldest continuous parliament in the world, the High Court of Tynwald – dating back more than 1000 years it is the foundation of the Island’s political and economic stability.
Today the Island, situated in the Irish Sea between England and Ireland, boasts a mature financial services and fiduciary sector that has diligently curated a robust regulatory and supervisory regime.
The government and industry have worked together to cultivate a professional and skilled workforce to ensure it continues to prosper.
As a common law jurisdiction, the Isle of Man attracts an international clientele. Its progressive legal and regulatory framework, rooted in English law, offers reassurance and gives the peace of mind essential for clients navigating the complexities of global wealth management.
Why Abacus?
The Abacus Trust Group is a well-respected independent provider of professional, fiduciary, and management services who work in partnership with private client advisers to establish and manage bespoke structures for HNWIs, families, and entrepreneurs. We are very adept at implementing the structures they recommend to clients.
Originally part of Coopers & Lybrand, which later became PricewaterhouseCoopers, Abacus has a 40-year history of providing technical expertise and outstanding customer service – giving our clients the peace of mind they require.
It is licensed by the Isle of Man Financial Services Authority (FSA) and the experience and background of our key staff means we consistently deliver cost-effective, timely and practical support.
No action should be taken on the basis of this note, nor should it be construed as amounting to tax, legal or VAT advice. Suitable, specific and professional advice should always be obtained in respect on any particular issue.
