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Non-domiciled and deemed domiciled beneficiaries (before 6 April 2025)

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Non-domiciled and deemed domiciled beneficiaries (before 6 April 2025)

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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This guidance note explains the tax treatment of deemed domiciled and non-domiciled beneficiaries of non-resident trusts before 6 April 2025. The domicile rules are abolished from that date and domicile is no longer a relevant factor in how beneficiaries of non-resident trusts are taxed for 2025/26 onwards.

Introduction

The tax position of non-domiciled and deemed domiciled beneficiaries of non-resident trusts is a complex landscape mapped by successive changes in the law. Before 2008, UK resident but non-domiciled beneficiaries were protected by a cost-free remittance basis option for income tax and, like non-domiciled settlors, they were exempt from attribution of capital gains within the trust. Major changes in 2008, 2017 and 2018 have incrementally brought non-domiciles into the regime under which UK domiciled beneficiaries of non-resident trusts are taxed.

Changes introduced in 2008 scaled down some of the advantages of long-term non-domiciled status. The remittance basis charge was introduced to impose a cost on accessing the benefits of the remittance basis. See the Remittance basis ― overview guidance

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