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Tax on UK resident settlors of non-resident trusts (6 April 2025 onwards)

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

Tax on UK resident settlors of non-resident trusts (6 April 2025 onwards)

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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The domicile and remittance rules were abolished for tax years from 2025/26 (see the Abolition of the remittance basis from 2025/26 guidance note), heralding a new regime for taxpayers with offshore interests. However, the old rules will be relevant for many years to come as income and gains from previous years are remitted to the UK and while transitional rules apply.

The charging provisions for UK resident settlors of non-resident trusts

Where a UK resident settlor has created a non-UK resident trust, they may become personally liable to income tax or capital gains tax in relation to the trust’s income or gains, even if they do not receive a payment from the trust. The following legislative provisions levy a potential charge on UK settlors of non-resident trusts:

  1. •

    the settlements code set out in ITTOIA 2005, ss 619–648 imposes an income tax charge on settlors with respect to income arising within a ‘settlor-interested’ trust. The provisions apply equally to UK resident and non-resident trusts

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