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.