Partner, James Cowper Kreston, Global Mobility Lead, Kreston Global
Ian has been a partner at James Cowper Kreston since 2008, with a diverse portfolio of high-net-worth clients. Before he joined James Cowper Kreston, Ian began his career in a Big 6 firm, where he was a National Client Service Director, chairing the Estate Planning Group.
Ian is the global mobility lead for the UK for Kreston Global.
Offshore trust tax implications in the UK
June 28, 2022
Relocating to the UK with assets
If you are relocating to the UK as a high-net-worth individual, there are a number of steps you should consider before arriving in the UK. One of the pitfalls I often see clients succumb to is engaging my services after they have relocated to the UK, particularly when there is an offshore trust involved.
What is a trust beneficiary?
The person who will benefit from the trust.
What is a trustee?
The person who manages the trust.
What is a settlor?
The entity that creates the trusts and adds assets to that trust.
Protecting the tax status of an offshore trust
Offshore trusts can enjoy tax privileges in certain circumstances. For example, entering the UK if you are a beneficiary of the trust, this does not usually attract tax penalties. However, there may be tax issues if you are the settlor of a trust, or, if after coming to the UK, all the trustees are resident in the UK. That might have the unintended consequence of making the trust UK resident and losing the privileged tax status that the trust enjoyed when it was resident offshore with respect to the UK.
What to do before you arrive in the UK if you have an offshore trust
If there is such a trust in existence, perhaps a family trust of which you are a beneficiary, then you should discuss this and the exact circumstances in your case with your UK tax adviser during your pre-arrival briefing and before you arrive in the UK.
Hear Ian Miles giving tax advice on moving to the UK the latest Expatland podcast here.