TAXguide 04/17 - Offshore trust changes
In TAXguide 04/17 - Offshore trust changes, Sue Moore, technical lead for private client tax matters in the Tax Faculty, provides information from HMRC on the implications of changes to income tax legislation published on 26 January 2017.
On 26 January 2017, the UK government published draft income tax clauses that further amend this legislation. In TAXguide 04/17 Sue Moore shares information from HMRC on these additional changes.
Most notably the new clauses extend the rebasing provisions to non-reporting funds, a common investment vehicle for non-doms.
Non-reporting funds do not report income and gains to HMRC as they arise and no tax is paid until a sale of the fund. The gain on the sale of the non-reporting fund is taxed as income; it is an offshore income gain, but the tax could be avoided by a non-dom using the remittance basis.
While the clauses remain in draft, and there will be changes when the Finance Bill 2017 provisions are published on 20 March 2017, there is information on transfer of assets and settlement legislation that ICAEW Tax Faculty has agreed with HMRC that can be published ahead of the Finance Bill and are detailed in TAXguide 04/17.