TAX BACKING FOR TRUSTEES
WE ARE YOUR TAX EARLY WARNING SYSTEM
What passes unnoticed in day-to-day mandate work is increasingly becoming a personal risk for you as a foundation or board member of an asset structure: entirely ordinary events such as a change of residence, a financing arrangement or an investment now have a tax dimension, and as a member of its governing body, you are accountable for recognizing it in time. The good news: these risks announce themselves. Knowing the early warning signals and acting early turns risk into advantage. You gain room to maneuver, planning certainty and a stronger position with your clients. Specialised support in the background makes exactly that possible, without giving up control over the mandate or the client relationship.
Acting early makes the difference in three ways
When it comes to tax issues in asset structures, timing is everything. Those who look early can shape the outcome: choose the right option, or obtain a ruling before the authority has formed an opinion. Those who come too late can often only react. This window closes with the triggering event. Acting beforehand not only avoids damage, it creates value:
(1) Room to maneuver. You choose the better solution, not the last one available.
(2) Planning certainty. Transactions and changes proceed without last-minute surprises. Foresight replaces last-minute intervention.
(3) A stronger position. A trustee who identifies and resolves issues proactively is no longer just administrating the structure — they become the indispensable adviser. This deepens the relationship and turns forward-looking support into a distinct, valuable service.
MICHAEL ABEGG
Partner & Managing Director
Stay in control. Management of the mandate and the relationship with the client remain firmly with you. What you hand over is not the responsibility, but the burden of having to be a specialist in every jurisdiction yourself.
How we keep your back covered
It is the ordinary mandate events that matter, provided they are recognised for what they are. Do you need to be a specialist in every relevant jurisdiction yourself? No. You keep the overview and bring in the specialist knowledge. Red Leafs Tax specialises in cross-border tax issues relating to foundations, trusts and other asset structures, and supports you in the background:
(1) Classify early warning signals. A short conversation is often enough to clarify whether an event is tax-relevant before it becomes a case.
(2) Review planned steps. Distributions, loans, restructurings, changes of residence: we examine the tax dimension in Liechtenstein, Switzerland and, together with our partner firms, in all other relevant jurisdictions.
(3) Secure solutions. From the comprehensive analysis through to the ruling, while the window is still open and structuring is still possible.
We work in the background so that you can act confidently towards your client. Management of the mandate and the relationship with the client remain firmly with you. What you hand over is not the responsibility, but the burden of having to keep track of everything on your own.
TYPICAL EARLY WARNING SIGNALS FROM PRACTICE
- Death of the settlor. Reserved settlor’s rights lapse upon the settlor’s death. A previously transparent foundation can lose its status, with inheritance tax consequences of up to 40 percent in Switzerland, for example. The signal is not the death itself, but everything that makes it foreseeable.
You can read the whole case study here.
- Loans from the foundation. What looks like a pure financing matter can overturn the foundation’s tax status. Identified early, the risk can be defused: the financing is structured deliberately, and unpleasant tax consequences are avoided.
- An item in the annual accounts. A single balance sheet item can trigger a reporting and payment obligation with a deadline. Knowing what to look for when preparing the accounts means meeting the deadline and avoiding fines and criminal liability.
Shape where possible. Resolve where necessary.
Before the triggering event, you have the greatest room to maneuver. That is when we shape. If the event has already occurred, we resolve: we limit the consequences, catch up on a filing, prepare a voluntary disclosure correctly or find a workable solution with the authority in proceedings. Even then, we step in with the same specialist knowledge as at an early stage. The sooner you involve us, the more can be shaped. But it is rarely too late to limit the damage.
Contact
Do you have questions about your tax situation or our services? Contact us – we are happy to advise you.
Red Leafs Tax Ltd.
Drescheweg 1
9490 Vaduz
Liechtenstein
Phone: +423 377 12 30
E-Mail: info@redleafstax.com
Mailing address in Switzerland:
Red Leafs Tax Ltd.
c/o Dr. Patrick Waldburger
Neugasse 40,
CH-9000 St. Gallen