Private Wealth Management Trusts in Barbados

Domestic Trust

Where the trustee is a Barbados resident individual or company and the trust deed does not specify that it is an international trust, it will be considered a domestic trust.

Barbados tax will be payable on any trust income not paid to a beneficiary before the end of the calendar year in which it was earned.

Domestic trusts are generally entitled to treaty benefits. This is because they meet the test of being “subject to tax” in Barbados and hence deemed resident for purposes of the treaty residence article. Treaty benefits potentially can substantially reduces or even eliminates tax in the other treaty jurisdiction.

Domestic trusts have the following features:

majority of trustees must be Barbados residents;

trustee can be an individual or a trust company licensed under the Financial Institutions Act 1996-1;

worldwide income is taxable;

expenses are subject to value added tax (“VAT”) in Barbados;

exemption from exchange controls may be received if the trust has foreign assets, non-resident beneficiaries, and deals primarily in foreign currency;

perpetuity period of 80 years; and

no registration or filing requirements.