A trust works by taking assets out of the ownership of the person establishing ('settling') the trust and putting them into the hands of a trustee. An offshore trust is simply one based in an offshore jurisdiction and its profits are usually not taxable there. The trustee normally follows the wishes of the settlor. Trusts, which are based in 600-year old English common law, have been in common use for offshore asset protection for nearly 100 years. Unfortunately, the high-tax countries have therefore had plenty of time to defend themselves against trusts, and by now their usefulness has been severely compromised for the residents of many high-tax countries.
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