Warning for Offshore Trusts
A recent decision from the Special Commissioners has highlighted the fact that UK advisers should not take too much of a hands on approach with regard to offshore trusts. The particular case (Trustees of the Trevor Smallwood Trust and HMRC) involved a tax scheme to avoid UK capital gains tax.
Briefly the facts were:
- A Jersey trust held shares that were pregnant with gain which would have been assessed on the UK resident settlor if they were realised.
- On the advice of UK tax advisers new trustees were appointed who were resident in Mauritius.
- The plan was that the Mauritian trustees would sell the shares and subsequently, but in the same UK tax year, the Mauritian Trustees would resign in favour of UK trustees.
- Under the Double Tax Treaty with Mauritius the gains would have assessable in Mauritius (with no tax payable) and not in the UK.
Date: 4th March, 2008
Articles from this Author
2nd May, 2017
UK Property – still the real deal?
17th June, 2016
Update on the Annual Tax on Enveloped Dwellings (ATED)
26th November, 2015
Property round-up - Autumn Statement
8th July, 2015
Buy-to-let investors - tax changes ahead
Contact a Private Client Partner
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole