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Budget 2008 - All Settled Offshore?

The Budget announcement today includes some welcome clarifications and relaxations on the extension of the offshore trust capital gains tax rules to non-UK domiciled individuals from 6 April 2008. The main points to note are that :

  • Non-UK domiciled settlors will not be taxed on gains arising to offshore trusts under the “settlor charge”.
  • Non-UK domiciled beneficiaries will not be subject to effective retrospective taxation on gains, or capital payments, arising before 6 April 2008. Offs
  • hore trustees will be able to make an election to rebase assets to 6 April 2008 values so that gains accruing before that date will fall outside the charge to tax for non-UK domiciled beneficiaries.
  • Offshore trust gains arising and matched with capital payments on or after 6 April 2008 will potentially be taxable on non-UK domiciled beneficiaries.
  • Gains arising in respect of UK as well as non-UK assets can be taxed on the remittance basis.
  • The requirement to provide detailed disclosure of information on offshore trusts to HMRC has in large part been dropped.

The changes clearly reflect many of the concerns raised during the consultation process on the draft legislation published in January and are perhaps more generous than expected. This does remove much of the pressure to take significant actions in respect of offshore trusts before 6 April 2008. However, specific advice should be sought in all cases.



Date: 13th March, 2008
Author: Lisa Spearman


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