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International Trusts Law, 1992

By Carolyn Mills,2014-06-26 09:08
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International Trusts Law, 1992

REPUBLIC OF CYPRUS

     THE INTERNATIONAL TRUSTS LAW OF 1992

    A LAW TO PROVIDE FOR REGULATION OF INTERNATIONAL TRUSTS

    PART I - INTRODUCTION

The House of Representatives enacts as follows:

    Short title.

    1. This Law may be cited as the International Trusts Law of 1992.

    Interpretation.

    2. In this Law, unless the context otherwise requires -

    “Court” means the President of a District Court or a Senior District Judge of the district where the trustees or

    the trustee of the international trust or any one of them who is a resident of the Republic have their residence;

    “immovable” has the meaning assigned to this term by the Trustee Law;

    “international trust” means a trust in respect of which -

    (a) The settlor is not a permanent resident in the Republic;

    (b) at least one of the trustees for the time being is a permanent resident in the Republic;

    (c) none of the beneficiaries, other than a charitable institution, is not a permanent resident of the

    Resident of the Republic;

    (d) the trust property does not include any immovable property situated in the Republic:

    Provided that a trust shall not fail to qualify as an international trust by reason only that either the

    settlor or the trustee mentioned in paragraph (b) or any one or more of the beneficiaries is a partnership or

    company qualifying under Section 8Y or Section A, of the Income Tax Laws, respectively.

    “purpose trust” or “trust for a purpose” means a trust other than -

    (a) Trust with beneficiaries certain individual or legal persons readily ascertainable or not, and

    (b) trust with beneficiaries the whole of certain individuals or legal persons which are

    ascertained with reference to some personal relation or affinity;

    “trust” has the meaning assigned to such term by the Trustee Law and includes also the bequest;

    “trustee” means the trustee of the trust or the trustee and includes legal and individual persons.

    PART II - PROVISIONS APPLICABLE TO INTERNATIONAL TRUSTS

    Validity of international trust.

    3.(1) A Settlor who transfers or disposes in any other way an asset to an international trust shall be deemed to have the capacity so to do if such person is at the time of such transfer or disposal of full age and of sound mind, under the law of the country of which he is permanent resident. The law in force in the Republic or in any other country relating to inheritance or succession shall not affect in any way such transfer or disposition or otherwise affect the validity of such international trust.

    (2) An International Trust shall not be void or voidable in the event of the settlor’s bankruptcy or liquidation or in

    any action or proceedings against the settlor at the suit of his creditors notwithstanding any provisions of the law of the Republic or of the law of any country and notwithstanding further that the trust is voluntary and without consideration having been given for the same, or is made on or for the benefit of the settlor, the spouse or children of the settlor or any of them, unless and to the extent that it is proven to the satisfaction of the Court that the international trust was made with

    the intent to defraud the creditors of the settlor at the time when the payment or transfer of assets was made to the trust. The onus of proof of such intent lies on his creditors.

    (3) An action against a trustee of an international trust pursuant to the provisions of subsection (2) must be brought within a period of two years from the date when the transfer or disposal of assets was made to the trust.

    Presumption against avoidance of international trust.

    4. Unless an international trust contains an express power of revocation it shall be deemed to be irrevocable by the settlor or his legal personal representatives, notwithstanding that it is voluntary.

    Duration of international trust.

    5.(1) For the purposes of this Law and notwithstanding any legal provision to the contrary, or of a rule of law of the Republic or of any other country the duration period of an international trust may continue until the one hundredth anniversary of the date on which it came into existence when it will terminate, unless terminated sooner due to a relevant direction in the instrument creating it or for any other reason.

    (2) Subsection (1) shall not apply to charitable trusts or trusts for a purpose referred to in this Law which may continue in force without any time limitation.

    Validity of terms of non distribution of income.

    6. A direction in an instrument creating an international trust for non distribution of income is valid for any period within the duration of the trust.

    Charitable trusts and trusts for a purpose.

    7.(1) Notwithstanding the provisions of the Constitution of the Republic of Cyprus and notwithstanding any legal provision to the contrary of the law of the Republic or the law of any country, an international trust shall be deemed to be charitable where the trust has as main object the achievement of one or more of the following:

    (a) The relief of poverty;

    (b) the advancement of education;

    (c) the advancement of religion;

    (d) other purposes beneficial to the public as a whole.

    (2) An international trust established for one or more of the objects or purposes set out in subsection (1) shall be deemed to be charitable, notwithstanding that -

    (a) The object or purposes are not of a public nature or for the benefit of the public, but may

    benefit a section of the public, or that it may also benefit privately one or more persons or

    objects or persons within a class of persons; or

    (b) the international trust is liable to be amended or to be terminated whether by the exercise of a

    power of appointment or disposition of assets; or

    (c) the trustee has the power to defer the distribution of the benefits to any charity of the trust for

    a period not exceeding the period of the trust; or

    (d) the international trust is or is deemed to be in the class of discretionary trusts.

    (3) Notwithstanding any legal provision to the contrary of the law of the Republic or the law of any other country, an international trust shall not be void or voidable by reason only that the trust is a trust for a purpose, provided that when the trust is not a perpetual trust or when it may be terminated, the instrument creating the trust shall specify the event or the events upon which the trust terminates and provides for the disposition of the net assets of the trust upon its termination. An international trust so created shall be enforceable by the settlor or his personal representatives or by the person or persons named in the instrument establishing the trust as the person or persons appointed to enforce the trust and the trust shall be enforceable at the instance of the person or persons so named notwithstanding that such person or persons are not beneficiaries under the trust.

    Authorised investments.

    8. Subject to the provisions of the instrument creating an international trust, the trustee may at any time invest the whole or any part of the trust funds in any kind of investment:

    (a) Wherever the investment is situated; and

    (b) whether or not the funds have already been invested.

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