Although exempt trusts are utilized to save or avoid taxes, this is not their main function. There are no estate duties and capital gains taxes in Belize. Additionally, there is no income tax or stamp duty on exempt trust income whether arising within or with-out Belize. Therefore, where assets are held by a trustee through a Belize Exempt Trust, the income and profits accruing thereto are tax free. Even though the exempt trust and its assets are free from all forms of local taxes in Belize, it may be taxable in the settler’s home jurisdiction.
Therefore, where an exempt trust with asset protection provisions is contemplated, the settler should always seek tax advice in his home jurisdiction.