The tax and business adviser, part of the international PKF network, said tax may be able to be saved – depending on specific circumstances – by “realising latent capital gains on non-business assets or by making payments to UK beneficiaries from an offshore trust now, rather than later.”
John Bradley, of PKF Guernsey, said supplementary charges may also be applied on gains ‘stored up’ in offshore trusts prior to distribution to UK taxpayers.
He said: “At the current CGT rate of 18%, this results in a maximum charge of 28.8%. In contrast, if the rate rises to 40% or 50%, the maximum charge would be 64% or 80% respectively.”
Bradley also noted there has been speculation that the £10,000 annual CGT exemption may be “decreased significantly”, possibly creating a further reason to realise gains ahead of the June 22 budget.
He said that trust capital gains accrue to the beneficiary for tax purposes in the year a capital payment is made to them.
But there was no “stipulation as to when in the tax year the gain is considered to have arisen to the beneficiary and as such the question of how a mid-tax year rate change would be applied and whether it would be possible to access the lower rate by ensuring the distribution is made before the date of the rate change is open to interpretation at this stage.”
