As a reminder, BIC cannot give legal or financial advice, so all of these answers are only our seasoned collection of information from experience – – not advice as to what any one client should do. We can simply say that worldwide, the NLT is non-statutory, meaning it is not written under the statutes of any government. Thus it is an exception to the normal statutory requirements. The NLT is based on the universal right of private contract. This is a right, not a privilege – – so it cannot be denied by any government.
To our knowledge, most every client of the NLT worldwide has been successful in operating them privately without registration. Those who have been successful have been legally and lawfully operating their trusts in private. We have all found that this is in the best interests of the beneficiaries, because the confidentiality protects them from possible swindlers. Administration of a private trust as a pass-through entity includes that income taxation issues are handled before assets are exchanged in the trust or after beneficiaries receive benefits. The NLT is also considered a discretionary trust and all funds received by the trust can be treated as trust corpus rather than income.
For clients who plan to put real estate property into an NLT in the UK and countries where public recording requires government registration, see the answer in these FAQs to the related question “In countries like the UK that now seem to be requiring trust government registration before the public recording of trust real estate ownership, what is the solution?” The answer to that question provides two different possible solutions for consideration to this new UK requirement.
