The bill of law relating to the creation of a Luxembourg private foundation (“fondation patrimoniale”), recently amended by the Ministry of Finance, is expected to be adopted by Parliament before summer 2015.
The long-awaited new Luxembourg wealth-planning vehicle will have legal personality to hold assets directly. The foundation will be an orphan structure (i.e. without shareholders) formed by one or several founders who will designate one or several beneficiaries.
The foundation will be subject to corporate tax but should be subject to certain exemptions in respect of wealth tax – income derived from transferable securities (dividends and interests) and capital gains, withholding tax on distributions made by the foundation to its beneficiaries and Luxembourg double tax treaties.
Following the creation of the private foundation, Luxembourg will enhance its position as a jurisdiction of choice for estate practitioners and wealth management.