Implied Trusts & Beneficial Ownership - Latest Tax Guidance

Introduction

Equitable or 'beneficial' ownership is what determines who is subject to income tax, capital gains tax, and inheritance tax, it is not necessarily the legal owner of the income stream or capital asset.

An implied trust uses presumed intentions and the principles of equity to place the beneficial ownership of the income/asset on the 'real' owner, ensuring that despite what happens to the legal title, the beneficial owner is identified and treated as the actual owner. It may be that, on the face of it, the legal ownership has passed from person A to person B, but depending on the circumstances, person A might remain the actual owner - it is essential to know whom to tax.

HMRC guidance makes clear that the beneficial owner is the true taxpayer; legislation too plays its part - the settlements legislation is nearly 100 years old, ensuring that artificial transfers of income streams are tackled, with cases having been decided in the highest courts; likewise, the Transfer of Assets Abroad legislation ensures that the beneficial owner of the income is responsible for paying the tax.

What You Will Learn

This webinar will cover the following:

• The different types of implied trusts and how they differ from express trusts
• Potential situations whereby beneficial ownership might not follow the legal ownership
• How HMRC could challenge the transfer of an asset/income stream

This webinar was recorded on 24th February 2023