Lennox Paton updates
Special tax relief for Abaco and Grand Bahama
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 30 January 2020
To encourage the rebuilding effort in Abaco, Grand Bahama and the surrounding Cays after Hurricane Dorian, tax relief is now available for real property tax, value added tax (VAT) on the conveyance of real property, business licence tax and certain import duties and VAT, provided that certain conditions are met.
Supreme Court identifies its jurisdictional limits to assist in trust arbitration proceedings
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 29 August 2019
The Supreme Court recently clarified its jurisdictional limits to assist in trust-related arbitrations, ruling that it has no such jurisdiction to allow service outside an action's jurisdiction. Given this ruling, parties to trust arbitration agreements must be cognisant that, notwithstanding whether their trust deeds provide for the seat of any arbitration to be The Bahamas, the court can provide only limited assistance where the arbitration is not held and the parties or assets are not in The Bahamas.
Privy Council determines extraterritorial reach of clawback claims in insolvency proceedings
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 22 August 2019
The Privy Council has determined that, notwithstanding the absence of express statutory provisions permitting service out of the jurisdiction of fraudulent preference claims, such claims are to have extraterritorial effect. This decision clarifies the law as it relates to the extraterritorial effect of fraudulent preference claims; however, it also creates difficulties for subscribers to mutual funds that may be held liable for investments made on behalf of third-party beneficiaries that are the ultimate recipients of payments.
New tax reforms in effect
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 18 July 2019
In the 2019/2020 Budget Communication the government announced various tax reforms which came into effect on 1 July 2019. Among other things, the cap on owner-occupied property has increased from B$50,000 to B$60,000 per year and stamp duty on real property has been replaced by value added tax (VAT) at the same rates. Further, any party that is required to become a VAT registrant must have a business licence.
Extinguishment of purchasers' rights – importance of priority in unregistered land systems
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 20 June 2019
The Bahamas has an unregistered land system that is based on the conveyancing laws of England and Wales issued before 1925. Therefore, deeds and documents should be recorded in the Registry of Records in The Bahamas as soon as possible. Priority becomes particularly important in high-net-worth commercial and condominium development transactions.
Register of Beneficial Ownership Act: a new day for beneficial owners
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 09 May 2019
Since 2001 international organisations such as the Financial Action Task Force have pressured offshore financial centres to pass legislation in order to increase transparency within their financial services sectors. As such, the Register of Beneficial Ownership Act recently came into effect in The Bahamas. The act seeks to create a private search registry containing details of beneficial owners of domestic and international companies in The Bahamas.
Bahamian insolvency regime continues to promote judicial efficiency
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 28 February 2019
The Bahamian legislature continues to examine its existing legislation for ways to promote judicial efficiency by amending and implementing new procedures in its insolvency regime. As the global economy continues to grow and foreign companies and investors increasingly face obstacles arising from the use of offshore structures, the need for cross-border insolvency proceedings and the use of protection afforded to investors will likely continue to increase.
Buying real estate – when to engage an attorney?
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 21 February 2019
After finding the ideal property to purchase, what is the next step? Engage an attorney. An attorney can help to connect real estate buyers with key service providers in order to arrange, among other things, home inspections or insurance. Involving an attorney will make the difference between a smooth transaction that meets the expectations of the buyer versus one that is fraught with issues, unrealistic expectations and other obstacles which could have been avoided with the benefit of early advice and proper planning.
Foreign direct investment in real estate market
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 14 February 2019
Foreign direct investment (FDI) remains one of the key catalysts to the Bahamian economy's growth and sustainability. The Bahamas National Investment Policy seeks to boost the economy through investments and provide favourable returns for investors. To this end, it encourages FDI in key areas in the real estate market, including tourist resorts, upscale condominiums, timeshares and second-homes and marinas.
Supreme Court evaluates scope of trustees' protection in contentious trust litigation
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 09 August 2018
The Supreme Court recently assessed the protection afforded to trustees by virtue of Section 83 of the Trustee Act 1998, which provides that a trustee cannot be bound or compelled by way of discovery to disclose information and documents about a trust. In Dawson-Damer, a trustee had used Section 83(8) as a basis to refuse a disclosure request. The applicant's case was built primarily on the allegation of a breach of duty (ie, the trustee had failed to consider the applicant's needs).
Payment of preferential debts out of assets subject to floating charge not permitted
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 26 October 2017
The Supreme Court recently considered whether preferential creditors have any claim against the moneys received by receiver-managers for the sale of assets subject to a charge. The court determined that a floating charge which crystallised before the making of a winding-up order takes priority over other creditors.
Privy Council clarifies Bahamian law on appealing interlocutory judgments
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 15 June 2017
There has been some debate over the lack of clarity regarding the concurrent jurisdiction of the Supreme Court and the Court of Appeal as to where and when applications for leave to appeal and stays should be made. A recent Judicial Committee of the Privy Council ruling has clarified this area of the law and given attorneys clear guidance regarding the proper procedure for appealing interlocutory judgments and applying for a stay pending appeal in the Bahamas.
Remittal of assets in cross-border insolvency proceedings
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 20 April 2017
The Bahamas Supreme Court recently considered the relationship between the statutory provisions in recognition proceedings which permit the turnover of property to a debtor (a foreign corporation or other foreign legal entity subject to a foreign proceeding in the country in which it is incorporated or established) and the common law power to direct remittal of assets to the foreign main proceedings where an ancillary liquidation is underway.
Hastings-Bass rule enshrined in law
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 13 April 2017
The recently enacted Trustee (Amendment) Act has clarified the law relating to trustee indemnities and given statutory effect to the rule in Re Hastings-Bass. With the passing of the act, the Bahamas has fortified its position as a leading offshore financial centre. It is expected that the codification of the rule will benefit trustees, protectors, beneficiaries and other persons who can apply to the court to unwind any perceived hard consequences flowing from an exercise of a fiduciary power.
Receiver-managers obtain court's blessing: self-dealing and fair-dealing rules not violated
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 15 December 2016
The joint receiver-managers of the assets of Baha Mar applied to the Supreme Court for a direction that the intended sale of Baha Mar's secured assets to a special purpose vehicle (SPV) would not amount to self-dealing or infringe the fair-dealing rule. The court was satisfied that the sale to the SPV was pursued by the joint receiver-managers in good faith and achieved after adequate precautions were taken to achieve the best price reasonably obtainable at the time.
Bahamian law on disclosure of trust information
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 08 December 2016
The case of Dawson Damer v Taylor Wessing arose out of a dispute between a beneficiary of trusts governed by Bahamian law and a Bahamian trustee. The beneficiary made subject access requests under the UK Data Protection Act 1998 to the trustee's London solicitors who refused to provide the information. This resulted in the beneficiary applying to the court for an order requiring the law firm to comply with the subject access requests.
Legal proceedings stayed in favour of mediation in accordance with Arbitration Act
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 15 September 2016
The Supreme Court recently determined that legal proceedings should be stayed based on the construction of the dispute clause in an arbitration agreement. The court held that there is persuasive authority even where an arbitration clause is discretionary, and that a party retains the option of invoking this authority. It was therefore reasonable for the court to conclude that referral to mediation was contemplated before arbitration proceedings could be pursued.
Supreme Court exercises statutory jurisdiction to wind up foreign company
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 23 June 2016
The Supreme Court of the Commonwealth of the Bahamas has acceded to the petition for Caledonian Bank Limited to be wound up as a foreign company pursuant to the Companies Winding-up Amendment Act, thereby exercising its jurisdiction for ancillary winding-up proceedings to be entered into. A petition was filed to wind up the insolvent company in the Bahamas so that the company's liquidators could access property in this jurisdiction.
Bahamas designates list of relevant foreign countries
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 19 May 2016
The Liquidation Rules Committee has published the Foreign Proceedings (International Cooperation) (Relevant Foreign Countries) Liquidation Rules 2016. The most recent statutory enactment in relation to corporate insolvency in the Bahamas is the designation of a list of relevant foreign countries to which the Bahamian court will extend international cooperation in insolvency proceedings.
Cayman Bank liquidators denied common law and statutory recognition in the Bahamas
Lennox Paton- Private Client & Offshore Services
- Bahamas
- 31 March 2016
In a "jurisprudentially unattractive" decision, the Supreme Court of the Commonwealth of the Bahamas has refused the liquidators of Caledonian Bank recognition in the Bahamas, where assets in the region of $16 million are held. By refusing recognition to the liquidators, the court has declined to grant assistance to liquidators which are meant to protect the interests of creditors, not the debtors' estate.
