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

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

Non-domiciled and deemed domiciled settlors (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 settlors 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 settlors of non-resident trusts are taxed for 2025/26 onwards, other than where transitional rules apply.

Significance of domicile for non-resident trusts (before 6 April 2025)

The extent of a trust’s liability to UK income tax and capital gains tax is dependent upon its residence status. Within the trust, the liability of a non-resident trust is restricted to UK source income. See the UK tax position of non-resident trusts guidance note.

Since non-resident trusts may escape liability to UK taxation on their foreign income and gains, there are extensive anti-avoidance rules which charge UK residents who have created or benefited from them. These provisions and their application to UK resident and UK domiciled individuals are described in more detail in other guidance notes in this sub-topic. Their scope is so wide that

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