offshore trusts and residency

[freeflight]

I have the proceeds from the sale of a business. If I were to place these in, for example, a channel island trust, would I pay tax at the Channel Island rate or would I have to have residency there. I am aware that possession of a property confers residency in Gurensey so if one had a guresnsey property as well as a UK property where would the tax on the income from the CI trust be due?

[Taxbar]

I think what in essence you are asking is how do you obtain residency in Guernsey.

You will need to acquire either a lease or purchase a property and apply for residence in the island.

The UK has specific rules on residence and you would be restricted to spending less than 91 days a year taking an average over 4 tax years.

I specialise in such issues and can assist you with obtaining residence in Guersney via an associated firm and the planning to avoiding any UK income or capital gains tax.

The rules are different for Inheritance Tax and relate to another test that of Domicile.


Daniel M Feingold
Barrister-at-law (NP)
Strategic Tax Planning
International & UK Tax Consultants
E-mail: info@stratax.co.uk

[freeflight]

Thanks for that Daniel. I would be interested in further expert help but I need to clarify my mind on these things first. No, the gist of the question was not how to obtain Guernsey residency (that seems fairly clear) but a) Is having a Guernsey residency the only way one can be taxed at Guernsey rates on Guernsey income? and b) I am aware of the UK requirements for maximum 91 days in the Uk to claim other residency but the States of Guernsey government website seems to say that one can be a guernsey resident if one simply has a property there. These two rules seem at odds. This is what I dont understand. see http://www.tax.gov.gg/infosheets/residence-for-tax.html
This can be read to say that if a person has a property and is present in Guernsey for 91 days then they are treated as resident fo rGuernsey tax purposes (para 1 c) I am presuming this would be for guernsey generated income only, hence my question about income from a Guernsey based trust or even savings account for that matter.
Clearly if one has a property in mainland UK it is easier to manage to be in Guernsey for 91 days than it is to arrange to be out of the UK for 244 days. What rules apply if one has two places of residence and fulfils the Guernsey rules of residing there for a minimum of 91 days? Which resindency rules have precedence?

[Taxbar]

It is possible to be resident in 2 countries/states at the same time.

The UK has a double tax arrangement with Guernsey that avoids such problems.

You need specialist advice and to be clear about what you are trying to achieve.

On your scenario, you would be treated as UK tax resident and if domiciled taxable on your world-wide income and gains.

Daniel Feingold