Trustee UK resident. Beneficiaries overseas. Assets overseas.

[Bridger]

Dear all,

We need advice, please. I am a UK resident, and as my parents (who live overseas) are ageing, and having trouble managing their assets, we the children are considering setting a Trust for them, to manage their assets and generate a pension for them. As I have some knowledge of economics and finances I could try to help them, as a trustee. Is this possible?

Trustee: UK resident
Beneficiaries: Not UK resident
Investments: Overseas (where they live)

Could this work?

Many thanks for any advice.

[Lee Young]

Your question is too broad to give a specific answetr. Could it work? Yes, but what is the real issue you are concerned about - tax (them or the trustees), administration, investment?

[Bridger]

Dear Lee Young, thank you for your reply. You are right, my question did lack focus. IÂ’m sorry.

I will try a very focus question now, regarding UK taxes. (I do have concerns about their taxes too, overseas [they are living in Brazil now], but naturally this UK forum wonÂ’t be able to clarify them. And I am reasonably confident that I can invest their money for them sensibly.)

I understand that as a foreign national I donÂ’t have to pay UK taxes over income from foreign investments. Hence, I understand that if they transfer their assets to my name, as a trustee, I wouldnÂ’t have to pay taxes over the revenues from the said assets.

However, for overseas taxes reasons I am concerned that if they ‘donate’ their assets to their son (me) I could have to pay taxes there, in Brazil - because I have lived there before, and I may still be in the local Revenue register.

From that perspective, would it be better if I set the Trust here as a company, and my parents transfer their assets to that ‘foreign’ anonymous company? This could solve the Brazilian side tax problem. HOWEVER, UK -companies- DO pay taxes over foreign profits, right? Hence, if the Trust is set as a company, my tax break would be lost, right?

Am I in a catch 22?

Besides, a Trust as a company would have more annual bureaucratic burdens, no?


Thanks again for your reply, and for any advice. Kind regards,

[Lee Young]

Definitely more bureaucracy involved with a company.

Your enquiry is going dowwn a line where a forum such as this can not offer adequate answers. You are best seeking advice from a professional on a one to one basis.

As a foriegn national you only avoid UK tax on oversears income if you leave it overseas - if you bring it to the UK it will be subject to UK income tax on the remittance basis. This is allon the basis that you are resident here, but domiciled elsewhere.