From the Archive – December 2011 by Milton Grundy
The partnership is the Cinderella of international tax planning – inconspicuous, undervalued and neglected. In many, if not most, countries, a partnership is treated as transparent for tax purposes – whether it is an open partnership or a limited partnership, so that for example a limited partnership which consist of two offshore companies and has no local-source income, has the “cosmetic” advantage of appearing to be onshore while having the freedom from tax of an offshore vehicle. Partnerships in the Netherlands, the US and UK have notoriously been used in this way (The Limited Partnership in International Tax Planning, 2002, Gerald Mehlman in Montreux, 1981, and Willem America in Amsterdam, 1985). In the United Kingdom, the offshore trust is coming to be seen as past its use-by date, and practitioners have been looking at partnerships as an alternative (Jonathan Conder in London, 2008 [link]). As long ago as 1981, David Goldberg (in Montreux) [link] made the casual observation that – for UK purposes at least – partners in a discretionary, contingent or Scottish partnership are not taxable on partnership income until it is distributed to them. If this is true in other countries as well, it is a feature calculated to take our young lady straight into the arms of her Prince Charming.
From the Archive – November 2011 by Milton Grundy
Foundations frighten common lawyers – no doubt in rather the same way trusts frighten civil lawyers. The ITPA has done its best to demystify them, and various aspects of the foundation have been discussed at our meetings over the years. Robert Boonacker gave us a broad overview in Monte-Carlo in 1995. The following year, Maximilian Eiselsberg in Budapest explained the nature of the foundation in Austria, and the Dutch aspect (the “Stichting”) was dealt with by Christian Strik in Interlaken in 1999. “Trusts and Foundations” was William Easun‘s topic in Monte-Carlo in 2005. The following year, in Nice, Steven Meiklejohn told us about the (then new) foundation in Jersey, and in Monte-Carlo the next year Philip Baker looked at foundations particularly from the viewpoint of the beneficiaries – a topic to which Robert Venables returned in his talk in Amsterdam in 2010. It would be an exaggeration to say that the Journal section of the website contains everything you wanted to know about foundations but were afraid to ask, but the reader in search of a broad enlightenment on the subject could do worse than peruse the text of these talks.