The decision made by the court for this case explains the issue being raised by the applicants and trustees of the case2. The decision also provides clear guideline for the associated organizations and individuals that are already involved or intend to get involved in the process of placing funds in offshore trusts while seeking confidentiality of their details and information. The essay explains the background of the issue and provides a brief synopsis of the case to allow having complete understanding of the context in which the entire case was evolved. Furthermore, the essay indicates other cases and decisions that have been kept in consideration while making this decision.
The wealthy people residing in different parts of the world have developed a common practice to invest their money in to the trusts of different other countries. These trusts are usually run by network of companies or the trustees of the country where the trust is established. The people placing their funds in these trusts generally have no substantial connection with the companies or the trustees but through their investment they became beneficiaries of the trusts they operate other than their own country. The managers of the trusts and the settlers placing their funds in the trusts have little interaction or face to face meetings but still these trusts act as tax havens for them3.
The trend of placing funds in offshore trusts was evolved in 1930s when some of the wealthy individuals realized that they have to pay heavy taxes and to avoid this they created some settlements using their money that allow the oversee trustees to accumulate their funds. When the capital gain tax was introduced in 1965, the trend of establishing such settlements further got momentum. However, the settlements were mostly formed in manner where the true identified beneficiaries were not used to clearly