Offshore Trust Structuring

It is still possible to structure your affairs tax efficiently as a non-domiciled individual but the rules are complicated and advice is necessary to ensure you are fully compliant with UK obligations.

We can provide advice on whether existing structures serve any purpose going forward and, if not, we can advise on how best to unwind the structure.  Similarly, we can advise on setting up new structures to ensure that the complexities of the UK tax rules are taken into account on set up.

The cost of running an offshore structure can become expensive if there are little or no corresponding tax benefits.  Given all the changes in UK rules, particularly in relation to UK residential property (and soon to apply to all UK immovable property from April 2019), it is important to understand whether the structure remains efficient.  Many structures no longer provide any tax benefits and therefore it is important to consider the tax implications of extracting the properties.  Please note, it is never advisable to move UK property of any type without first taking tax advice.

Case Studies

Mr Biggins has an offshore trust and company structure that was set up many years ago.  Originally it held shares in a UK business which was sold in 2010.  Since then the funds have been invested in various areas – more latterly in UK residential property.

Given the changes that have taken place in recent years, Mr Biggins has asked us to review his structure.  From 6 April 2015, the properties are taxed to non-resident CGT when they are sold.  Therefore any future growth in the property will be subject to CGT in the UK.  Any income from the properties is already taxed under the Non-Resident Landlords Scheme.  As from 6 April 2017, the rules for IHT changed and the value in the UK properties will form part of his UK Estate when Mr Biggins dies (as he is the main beneficiary of the trust) and will be subject to IHT at 40%.

The structure is costing in excess of £20k per year to run and therefore Mr Biggins decided that he would like to close it down.

We, therefore, provided a report on his options and make recommendations on tax efficient ways of achieving this.

Get in Touch

To get more information about Offshore trust structuring please use the form below or contact us on 01902 674492