Trusts in India may be required to comply with the rules of the Foreign Account Tax Compliance Act (FATCA) to report all details to the Internal Revenue Services of US
Last Published: Wed, Mar 28 2018. 04 39 AM IST
I am a US citizen and moved to India 2 years ago. I am planning to start a charitable old-age home, for which I need to create a Trust deed. As a US citizen, but resident of India, what is the process to create a Trust? Both the Trust and its assets will be in India. Do I need to report the Trust to the US?
—Valli
There are two basic things required to be able to form a Trust—power of disposition over property and competence to contract.
Setting up a charitable old age home would come under the purview of a Public Charitable Trust. There isn’t any Central Act applicable for public Trusts in India, but various states have their own Acts. If we assume that you will set up the Trust in Maharashtra, then provisions of Maharashtra Public Trust Act, 1950, would apply. In states that do not have a Public Trusts Act in force, provisions of Indian Trusts Act, 1882, apply.
Some basic details required to incorporate a Trust are drafting a deed of Trust and recording in it details of :
(i) The settlor, trustees, and the intended class of beneficiaries (public at large),
(ii) Objectives of the Trust,
(iii) Name of the Trust,
(iv) Minimum and maximum number of trustees,
(v) Address of the registered office of the Trust, and
(vi) Rules and regulations.
The deed of Trust has to be registered.
Some specific requirements have to be fulfilled for setting up the Trust, which would depend on the peculiarity and complexity of each Trust. You would require legal assistance in the matter. Trusts in India may be required to comply with the rules of the Foreign Account Tax Compliance Act (FATCA) to report all details to the Internal Revenue Services of US. It would be ideal to seek consultation of a lawyer practicing in US laws.
Amit Kolekar is associate partner, Rajani Associates.
Queries and views at mintmoney@livemint.com.
First Published: Tue, Mar 27 2018. 05 59 PM IST livemint
No comments:
Post a Comment