OFFSHORE TRUST AND STRUCTURE

Award Winning
London-Based
Immigration Tax Advisors

OVERVIEW

OFFSHORE TRUSTS

If you are a 
trustee of an offshore trust structure, or a UK resident beneficiary receiving
benefits/distributions from an offshore trust, you will need specialist advice
in order to understand and meet your highly complex UK tax obligations. 

Trustees of an
offshore trust structure can be liable to various taxes in the UK. These
include income tax on UK source income or capital gains tax on the sale of UK residential
property. Inheritance tax can also apply on UK situs assets which are
distributed from the trust or held at the 10th anniversary of the trust’s
creation. Expat Ltd is able to advise you on the UK tax implications for your
trust and its beneficiaries, including how to plan tax efficiently. 

Our specialist team
will help you to ensure your offshore trust is managed effectively. Through our
experience, we have identified many areas where issues can arise,
including:  

·       income
tax
 – UK resident settlors may become liable to income tax
arising in the trust; 

·       capital
disposals
 – UK resident and domiciled settlors will also be
subject to capital gains tax on all capital disposals by the trust; 

·       capital
distribution
 – UK resident beneficiaries of an offshore trust
can be subject to UK income tax or capital gains tax on the receipt of a
capital distribution (or if they receive a benefit from the trust such as an
interest-free loan or rent-free occupation of a trust property); and 

·       record
keeping
 – tax consequences for UK resident beneficiaries are
known to arise many years after they have received a benefit/distribution. It
is therefore important to keep trust records up to date. 

UK residents,
non-UK domiciled settlors and beneficiaries have a more flexible UK tax
position, with more chances to make tax-efficient plans. We can help you to
maximise any opportunity. 

Meeting your
obligations 

Expat  can
provide guidance and assistance to trustees to meet their UK tax obligations
and prepare: 

·       UK self-assessment
tax returns; 

·       inheritance tax
forms; and 

·       annual tax on
enveloped dwellings (ATED) returns.

We can also provide
advice to settlors/beneficiaries and prepare the calculations required for
their UK tax returns, to help ensure you retain accurate records.    

If you are
considering setting up an offshore trust, there can be some potential pitfalls.
At Expat  we would be pleased to talk to you about alternative structures
to protect your wealth, so please do not hesitate to get in touch with us for a
discussion.