Will Trusts – Ten Basic Facts

  1. When Might You Consider Using a Will Trust?

Will Trusts can be used to protect property and assets within an estate.

They can be particularly appropriate to provide gifts and inheritance for children from previous relationships and to leave assets to a vulnerable or disabled person.

  1. What are Other Potential Uses of Will Trusts?

Will Trusts can also be used for the following:

  • To provide income or property for a second spouse during their lifetime, ensuring that the assets then pass to any children from the first marriage, after the death of the surviving parent
  • Fund education for children and/or grandchildren
  • Protect assets from creditors or divorcing partners.

In situations where it is proposed to pass assets to individuals resident in other countries, whether permanently or temporarily, a Will Trust may secure tax protection for the  beneficiaries, from income and capital taxes, in the country in which they reside.

  1. What is a Will Trust?

A Will Trust, also known as a Testamentary Trust, can be created within a will to further increase the protection of assets that are being left to others.

Depending on the circumstances, it might be appropriate to create a formal trust. Trusts are entities that allow someone to benefit from an asset without being the legal owner. The ‘testator’ creates the trust and appoints a person to manage it – the ‘trustee’. The trustee manages the trust on behalf of the ‘beneficiaries’ – who will receive the income from the trust. The trustees will be named in the will and will be relied on to maintain the best interests of the beneficiaries, at all times.

  1. Need for Professional Advice

Trusts can be complicated structures with tax implications, and professional advice should always be taken, before establishing one.

The tax position, should be carefully considered in relation to; the trust, the individual settling assets into the trust, and the beneficiaries.

  1. Who can be a Beneficiary?

Anyone can be a beneficiary.

They might be:

  • A named individual
  • A class of individuals, such as ‘my grandchildren and their descendants’
  • A charity, or a number of charities
  • Another organisation, such a as a company or sports club.

It is possible for individuals who have not yet been born to be beneficiaries, this allows planning for future grandchildren and other descendants.

  1. Property Will Trusts

Property Will Trusts are also known as Protective Property Trusts. This type of trust offers additional security for testators who own property and want to secure it for future generations. There are a number of circumstances, as detailed below, where it might be of benefit to have a Property Will Trust:

  • Individuals who own a property with another person, including those who are married, unmarried, with or without children
  • Individuals wanting to protect against the value of a property being taken into account to pay possible care home fees in the future, a point which is particularly relevant in the UK.
  1. Flexible Life Interest Will Trusts

These are often used by individuals who own high value assets, where protection of the value is sought for future generations.

This type of Will Trust guarantees who will benefit from cash assets, property and investments if the testator’s partner; remarries after their death, creates a new will which changes the original wishes, or authorises a nominated individual to receive an income which is generated from the investment, following the death of the testator.

  1. Discretionary Will Trusts

A Discretionary Will Trust provides the opportunity to appoint a trustee to manage assets left to a beneficiary who is vulnerable and/or unable to manage his/her inheritance independently.

  1. How might a Will Trust be Beneficial in Estate Planning?

The most important element of a Will Trust is that it helps increase certainty as to who will inherit the assets of an estate.

It may also assist in achieving a number of financial objectives:

  • Take advantage of inheritance tax, business or agricultural relief, which otherwise might not be available after both an individual and his/her spouse have died
  • Discount the taxable value of a family home by splitting ownership between a surviving spouse and a trust
  • Help to ensure that a beneficiaries’ access to benefits or state support is not affected by an inheritance.

 How can Dixcart Help?

Dixcart can assist in advising individuals and families regarding establishing a Will Trust.

We have over forty years of experience in assisting individuals in establishing and managing trusts, and we offer trustee services across a number of the Dixcart offices. For further information please speak to the Dixcart office in the UK: or to your usual Dixcart contact.

Please also see our Trusts and Foundations page.

Portugal 1

New Double Tax Agreement: Portugal and Angola


Angola is one of the fastest growing economies in the world. Additional opportunities are available for companies established in Portugal due to implementation of double taxation provisions and the increased certainty that this brings.


One year after its approval, the Double Tax Agreement (DTA) between Portugal and Angola finally came into force on the 22nd of August 2019.

Until recently Angola did not have any DTAs, which makes this agreement even more significant. Portugal is the first European country to have a DTA with Angola. It reflects the historic ties between the two countries and completes Portugal’s treaty network with the Portuguese-speaking world.

Angola is a country rich in natural resources including; diamonds, petroleum, phosphates and iron ore, and it is one of the fastest growing economies in the world.

Following on from the United Arab Emirates (UAE), Portugal is the second country with which Angola has a DTA. This reflects Angola’s increasingly international perspective, and Angola also has approved DTA’s with China and Cape Verde.


The Portugal: Angola treaty allows for reduced withholding tax rates for dividends, interest and royalties:

  • Dividends – 8% or 15% (depending on specific circumstances)
  • Interest – 10%
  • Royalties – 8%

The treaty is valid for a period of 8 years starting from September 2018, and will therefore remain in force until 2026. The DTA will be automatically renewed and will further develop the economic relationship between Portugal and Angola, as well as enhancing tax cooperation, and avoiding double taxation of pensions and income generated by both individuals and companies.

Additional Information

If you require additional information regarding the Portugal and Angola DTA please speak to your usual Dixcart contact, or to António Pereira, at the Dixcart office in Portugal:


A Report – Recognising The Dynamic Growth of The Malta Financial Services Sector

The Malta Financial Services Authority (MFSA) has published its Annual Report and Financial Statement for the year 2018. It presents an overview of the activities and work carried out by the MFSA, together with details about the industry’s performance and explains the Authority’s vision for the coming years.

Despite a challenging and highly competitive environment, in 2018, the Maltese financial services sector continued to register significant growth rates, with a growth of 9.5% over the previous year.

Financial Services in Numbers

The MFSA registered an additional 144 new entities, as an increased number of businesses decided to make Malta their jurisdiction of choice, bringing the number of entities licensed by the MFSA up to over 2,300.

The financial services industry in Malta is a key pillar of the Maltese economy, contributing around 6% of Gross Value Added (GVA) in 2018, as shown in Chart 1.

At the end of 2018, the sector employed more than 12,000 people, 1,000 of which were new jobs created during that year. This brings the share of local employment within the financial services sector to 5.3%, almost double that recorded as the average for other member states of the European Union, which stands at 2.9%.

Deposits within domestic banks grew by 6.1%. These were mainly concentrated in current account deposits, with the share of such deposits amounting to around 70.3%. The amount of bank loans and advances grew for domestic banks: 6.3% for core and 18.0% for non-core.

The total assets of the securities and investment services sector in Malta grew by 8.3%, amounting to €11.7 billion in 2018. Corporate bond trading reached €93.7 million in 2018, up 22.5% from 2017.

The aggregate net asset value of Funds Domiciled in Malta totalled €11.7 billion, up 8% from 2017 and the locally managed assets of non-Malta domiciled funds grew by 9.1%, to €24 billion.

MFSA Vision for the Future

During 2018 MFSA published over 600 regulatory notifications to guide regulated entities and to safeguard the consumers of financial services.

The Virtual Financial Assets (VFA) Act came into force in November 2018, making  Malta a pioneer in the world of distributed ledger technologies and digital asset legislation.

The MFSA also signed a Memorandum of Understanding (MoU) with the Maltese Financial Intelligence Analysis Unit (FIAU) to enhance collaboration and improve the thoroughness of ‘Anti-money Laundering’ and ‘Customer Facing Staff’ on-site reviews and inspections.

Additional Information

If you would like further information on this subject, please contact the Dixcart office in Malta: or your usual Dixcart contact.

The Madeira (Portugal) Free Trade Zone – What Tax Benefits Does It Offer And Substance Requirements


The Madeira archipelago is part of Portugal and is located in the Atlantic Ocean, 978 km southwest of Lisbon.

During the past decade, Portugal has taken several steps to enhance its attractiveness to international business and high net worth individuals. Partially thanks to the Non-Habitual Residents tax programme implemented in 2009 and the Golden Visa residency programme introduced in 2012, Portugal has become one of the main ‘start up’ centres in the world and the preferred choice for the relocation of companies and highly qualified professionals and their families.

In addition, Portugal offers the advantages available through the ‘Madeira International Business Centre’(MIBC) which was approved by the European Union (EU) when Portugal formally joined the EU in 1986.

What is the Madeira International Business Centre?

The MIBC enjoys a series of incentives, predominantly of a tax nature, which have been approved by the EU until at least the end of 2027. These incentives are very attractive for appropriate international companies.

Created more than 30 years ago, the legal framework of the MIBC continues to be an efficient and clearly defined structure regarding transparency, compliance and economic substance.

The MIBC Tax Regime

Businesses registered in the MIBC benefit from the following tax advantages:

  • A reduced corporate income tax rate of 5% is applicable to active income (such as income resulting from trading activities or provision of services, etc.).
  • Under Portugal’s Participation Exemption Method, Madeira companies are exempt from withholding tax on the distribution of dividends, if certain conditions are met.
  • The participation exemption regime is also applicable to:
    1. capital gains received by the MIBC entity (a minimum of 10% ownership, held for 12 months, is required), and
    2. the sale of its subsidiaries, and
    3. the payment of capital gains to the shareholders, by the sale of the MIBC company.
  • Exemption from withholding tax on interest, service fees and royalties paid to non-residents.
  • Exemption from stamp duty, property tax, property transfer tax, and regional and municipal surcharges (subject to an 80% limitation per tax, transaction, or period).
  • Application of the double taxation treaties signed by Portugal.
  • Application of the investment protection treaties signed by Portugal.

Why the Madeira International Business Centre?

  • Madeira is part of Portugal and therefore benefits from the advantages of being a Member State of the European Union and also of the OECD.

Companies located in Madeira operate under a credible regime, supported by the 28 EU Member States. Madeira is not considered to be a tax haven, and is therefore not included in any international black lists.

  • Madeira companies are automatically given a VAT number, allowing them direct access to the EU intra-Community market;
  • All EU Directives are applicable to Madeira, guaranteeing a well-regulated and modern legal system that protects investors´ interests;
  • A highly skilled work force is available in Portugal and in Madeira;
  • Portugal is a politically and socially stable country;
  • Portugal, and Madeira, offer low operating costs compared to other European jurisdictions;
  • Madeira is a region offering individuals; security, quality of life, a mild climate and a high level of natural beauty.

Companies in the MIBC: Key Conditions

Companies wishing to establish themselves in the MIBC need to meet a number of conditions, including:

  • The MIBC company must apply for a Government Licence.
  • The reduced corporate income tax rate on income (5%) is applicable when the income is derived from an international activity, i.e. outside Portugal, or, when in Portugal, the business relationship is with another MIBC company.
  • The capital gains tax exemption (applicable to the sale of shares in the MIBC company) is not applicable to shareholders who are considered tax resident in Portugal or within a ‘tax haven’ (as defined by Portugal).
  • Exemption from Real Estate Transfer Tax (IMT) and Municipal Property Tax (IMI) for properties exclusively used for the company’s business.

The International Topic of Substance

Companies with offices in different jurisdictions are increasingly being asked to meet substance requirements.

An important features of the Madeira International Business Centre regime is that the law clearly defines appropriate substance requirements that must be met for the company to obtain the relevant tax benefits. These substance requirements essentially relate to the creation of jobs.

Substance Requirements

MIBC companies need to comply with well-defined and detailed substance requirements, currently one of the few countries in the world with this precise approach. Clients can therefore be confident that they have appropriate levels of substance in place, to match the activity of the company registered in Madeira.

This is verified in two different ways, at different times:

1.After the incorporation of the company (one-off requirement):

i. within the first 6 months of activity, the company must hire at least 6 workers, OR;

ii. during the first 2 years of activity, the MIBC company must invest €75,000 in the acquisition of tangible or intangible fixed assets.

2. On an ongoing basis, the company must have at least one employee on its payroll, paying Portuguese individual income tax and social security. This employee can be the Director or a Board Member of the MIBC company.

The corporate tax rate of 5% applies to a company’s taxable income. There is an upper limit of income which can enjoy this favourable tax rate, based on the number of jobs that have been created in Madeira by the company.

These figures are detailed below:

Job Creation Minimum Investment Maximum of Taxable Income Reduced Tax Rate Applies to
1 – 2 €75,000 €2.73 million
3 – 5 €75,000 €3.55 million
6 – 30 N/A €21.87 million
31 – 50 N/A €35.54 million
51 – 100 N/A €54.68 million
100+ N/A €205.5 million

The total benefits granted to companies licensed to operate in the Madeira International Business Centre are, however, capped at one of the following amounts:

  • 15.1% of the annual turnover; OR
  • 20.1% of the annual earnings before interest, tax and amortisation; OR
  • 30.1% of the annual labour costs.

How can Dixcart Help?

  1. The Dixcart office in Madeira can provide a complete range of services related to the incorporation of a company in the MIBC and its day-to-day obligations, including: accounting, legal, human resources, tax compliance and IT.
  2. Dixcart has a strong network of contacts in the professional and commercial sectors, both on the island of Madeira and mainland Portugal, and can introduce appropriate businesses to relevant individuals.
  3. Dixcart experts can assist entrepreneurs and their families in relocating to Portugal and/or Madeira and obtaining the necessary residence permits.

Additional Information

If you require further information regarding the MIBC and/or if you would like information regarding the types of company and tax frameworks available in Portugal, please speak to your usual Dixcart contact, or to Catarina Sardinha at the Dixcart office in Portugal: