London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

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
Author: Liz Cuthbertson

SHARE THIS

Articles from this Author

Contact a Private Client Partner

Tweet

Michael Lapham shortlisted in the Money Management Financial Planner Awards 2017 bit.ly/2fL8VXBtwitter.com/i/web/status/8…

#Farming trading as a #partnership potential #tax pitfalls and tips @mercerhole Phil Fenn insight shar.es/1SHZhc @accountancylive

Follow

LinkedIn

For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole

Click here to follow us on LinkedIn