Effective Wealth Management & Estate Planning
Undoubtedly, one of the most important and far reaching decisions you can make is to how best to protect and secure your assets for yourself and your future generations.
Although Malta is essentially a civil law jurisdiction, due to it being a past colony of England, Malta has adopted common law in as the basis of many of its commercial laws and English law applies where the law of Malta is silent.
Principally a civil law jurisdiction, the laws of succession and inheritance in Malta; whether immovable property (real estate) situated in Malta is subjected to the civil rules can be bypassed via the use of trusts, which serve to override the Malta civil laws of succession.
Upon commencement of ordinary residence in Malta, unless there has been a pre – nuptial agreement or a matrimonial contract dictating the framework that should be applied to individual and matrimonial assets the civil law principal of the ‘Community of Acquests’, which is akin to a matrimonial joint fund. Therefore to avoid difficulties upon commencing long term residency in Malta, it is suggested that a factor to consider is your matrimonial status and plans.
Your Malta tax status depends on whether you are resident or domiciled in Malta. Residency is not a temporary status but occurs after 6 months, whilst to be domiciled is – in its simplest level – depends on either your place of birth or your intention to be domiciled in a particular place.
Resident and domiciled in Malta – Malta income taxation is levied on a worldwide basis
Only resident and not domiciled – Malta taxation is only be taxed on income and capital gains arising in Malta, as well as income remitted to Malta.
As such, Malta personal taxation is always levied if income arises in Malta (not applicable to interest or entities).
Preferential tax rules apply in respect of High Net Worth Individuals (HNWIs) as well as High Earners.
Gift and Estate Taxes
None except for duty taxes upon transmission upon gifting or death of – immovable property or securities at 5% and 2% tax in respect of shares.
Capacity is determined by the law of domicile, whilst formal validity of a will is determined by the place of execution of will. If the place of execution is Malta, then it must be made before a notary public; if by secret will it must be deposited in the Second Hall of the Civil Court in accordance with strict formalities.
If you should like further assistance in regards to your Wealth and Estate planning, please contact us.