Trusts: How to get the jurisdiction right
By Kirsten Hastings, 5 Dec 17
Trusts form an important part of UK tax planning and can offer a wide range of opportunities. To advise a client correctly regarding the setting up and maintenance of a trust, it is important to establish if the trust itself is treated as a UK resident trust or a non-UK resident trust, says Canada Life.
The first step is to identify the residency of a trust. The residency at any time is determined by the residence status of the trustees at that time and can be affected by the residency and domicile of the settlor.
The test to determine the residency of a trust states:
- If all the trustees are either UK resident or non-UK resident then the residency of the trust will follow the status of the trustees.
- If at any time the trustees are a mixture of UK residents and non-UK residents then the trust is resident in the UK only if any settlor was resident or domiciled in the UK at the ‘relevant time’.
The definition of the ‘relevant time’ will depend on the type of trust being considered. If this is a will trust then it is the date of the settlor’s death and if it is a trust set up during the settlor’s lifetime then it is the date when any settlement is made to the trust.
Tags: Canada Life | Residency | UK Adviser | Wills And Trusts
