Offshore Trust and Settlor beneficiary

[jsmithalltaken]

An offshore discretionary trust was settled by a non dom UK resident and included settlor and spouse as potential beneficiaries. The Trust may now have some income next year. Can the settlor and his wife be removed as possible beneficiaries (say by a deed of exclusion) to make this a non settlor interested trust. If so will future income of the trust will still be deemed to be those of settlors? Settlors are now old and have no wish to benefit from the income or capital in the future. Other potential beneficiaries are their adult children and under 18 grand children some UK resident others not. All non domiciled.

[orest_shambs]

they can be excluded from beneficiaries provided that this was included in the trust deed usually as a triggering event provision i.e. to allow the settlor to be a beneficiary until the happening of
an event which triggers a new class of current beneficiaries

[maths]

If the trustees were granted power by the settlor to exclude beneficiaries from the original class then the settlor and spouse may be excluded.

Whilst this makes the trust non-settlor interested for income tax it will not be so for CGT.

Given the non-UK domicile nature of the settlor it is not strictly necessary to exclude him/her and the spouse from the trust in order to avoid an income tax charge on his/her part on income arising to the trust.

[maths]

Apologies.

The above:

Whilst this makes the trust non-settlor interested for income tax it will not be so for CGT

should have read:

Whilst this makes the trust non-settlor interested for income tax it will also be non-settlor interested for CGT.