Taxation of Non-UK Resident Trusts - Avoiding the Traps

Introduction

The taxation of non-UK resident trust structures is a notoriously complicated area and one which has come under increased scrutiny as it becomes a topic of political conversation.

It is critical for advisers whose clients have connections with such structures (whether as settlors, trustees, or beneficiaries) to understand the possible UK tax implications and key ‘red flags’ to look out for.

There has also been considerable speculation as to whether and how the relevant tax regimes might change after the next general election.

In order to put any proposed changes into their proper context it is important to first understand the rules as they currently apply.

This webinar will examine how settlors, trustees and beneficiaries can be exposed to UK taxes (income tax, capital gains tax, corporation tax and inheritance tax) in connection with non-UK resident trust structures.

It will also look at the ‘tainting’ rules (which can impact how income and gains are attributed to a UK resident settlor) and the ‘matching’ rules (which often determine how UK resident beneficiaries are taxed on distributions and other forms of taxable benefit).

A number of traps will be highlighted, and advice given as to how to avoid them.

What You Will Learn

This webinar will cover the following:

• The common structure for a non-UK resident family trust
• How UK tax laws generally apply to such trusts, including:
• The income tax and capital gains tax rules which can attribute income and gains from the structure to a UK resident settlor
• The income tax, capital gains tax and corporation tax rules which can be relevant to the trustees and/or underlying companies
• The income tax and capital gains tax rules which are applicable to UK resident beneficiaries
• The inheritance tax rules applicable to these trusts and how they can impact settlors, trustees and beneficiaries
• What ‘protected’ status is and how it can be lost (i.e. ‘tainting’)
• How the ‘matching’ rules work and traps to be aware of (including in particular how income arising in one trust can be ‘matched’ to distributions from another)