The Isle of Man has well-developed trust law based closely on UK trust legislation. Manx trusts are used to transfer legal ownership of assets from the settlor, who forms the trust, into the hands of the trustees who administer the trust for the benefit of third parties, the beneficiaries.

Where the settlor and beneficiaries of a Manx trust are non-residents, no Isle of Man tax liability falls on the trustees, provided the trust income, other than "approved" interest and dividends, arises outside the Island.

Trusts can be used as a means of transferring ownership on death and confidentiality is protected since there is no public register of trusts and no public filing requirements.

Trust law in the Isle of Man is principally set out in the Trustee Act 2001, the Perpetuities and Accumulations Act 1968 and the Recognition of Trusts Act 1988. In addition, being a common law jurisdiction, there is a vast amount of case law (mainly English) which is persuasive authority for the Manx courts. Legislation in the form of the Trusts Act 1995 and the Purpose Trusts Act 1996 has strengthened the position of the Isle of Man as a secure international jurisdiction in which to establish a trust. The Trusts Act 1995 has greatly assisted trusts established in the Isle of Man in resisting challenges in the applicable governing law by other (particularly civil law) jurisdictions.

The Purpose Trusts Act 1996 has facilitated the establishment of trusts for more commercially orientated purposes where previously a defined class of beneficiaries or charitable body had to be able to benefit.