Can I move abroad to avoid tax on uk trust income?

[PainterHero]

I am recieving income from a trust set up by my grandfather,s will in lumpsums 20% tax paid. I am an artist and would be happy to spend 9months a year out of england - and to buy a house ın Russıa or Chına or somewhere else. Would I be able to avoid uk income tax on this trust income?

[Simon Sweetman]

Well, possibly. You would have to cease to be UK resident for tax purposes, which means you will become resident somewhere else and pay tax there. If you are to cease to be UK resident then your visits to the UK will have to average less than 91 days a year. It's not simple at all and you would need to take professional advice.

You could contact me on simon.sweetman@btinternet.com

[Huw Williams]

One other thought is that you may be able to escape the UK tax net by moving abroad, but will this make any difference to your trust income.

If the trust is UK based, it will be deducting tax from payments to you wherever you live, and you would only be able to recover that tax if the tax rules in the country you move to allow it.

Of course the trustees may be able to change the nature of the trust assets to help you, but I would check with them before leaving the UK, in case they cannot help.

Huw Williams
217 Musters Road
West Bridgford
Nottingham
NG2 7DT

0115 914 6846

enquiries@huwwilliams.co.uk

[PainterHero]

The trust is deducting tax at 20%, so I have to pay %20 myself - whıch ıs what i want to avoid, altho it would be good to get that back. Also do I have to be resident somewhere or can I just move around? mıchael

[Huw Williams]

In theory you should be able to move around and I have heard there is a cruise liner for the super-rich which keeps moving for just this reason.

However there is still the basic difficulty of losing your UK resident status which is probably more easily proved by moving somewhere (rather than nowhere).

And if your trust income comes from a UK trust, it is still a UK source of income and so remains taxable in the UK at up to the highest rate.

Put another way, I do not think you can achieve the tax saving you are after without looking at both your circumstances and the trust.

Huw Williams
217 Musters Road
West Bridgford
Nottingham
NG2 7DT

0115 914 6846

enquiries@huwwilliams.co.uk

[Taxbar]

I think you will find that as mentioned above, there is no way to avoid the trust income being UK source, unless the assets comprised in the trust are sold and re-invested in assets that are not subject to income tax withholding.

So, going non-resident will not achieve your gaol.

Also you really need to go to location that either has no income tax e.g. Monaco or one that doesen't tax foreign source income e.g. Belgium.

The Inland Revenue are very reluctant to accept that those trvelling around and resident nowhere are not still UK Resident or Ordinarily Resident. If you try to demonstrate this you will end spending time on professionals arguing this out with the Centre for Non-Residents! Its really far easier to go to a fixed location!

Daniel Feingold
Strategic Tax Planning
International & UK Tax Consultants.
E-mail: info@stratax.co.uk

[PainterHero]

Thank you so much for your advice.
The trust assets comprise literary copyrıghts and the income is royalties. Have İ any hope?