Using corporate settlor

[Kristin]

Hello All. I would be grateful to know if there is any tax complication where a UK resident non domiciled individual uses a non UK company wholly owned by him to settle a discretionary trust, the beneficiaries of which are his spouse and children who are UK residents non domiciled. The trustee is a non UK corporate trustee. The assets to be settled to the trust are not UK situs assets. Will the corporate settlor be looked through as if its beneficial owner is the settlor? If so, will settling assets be a chargeable event? If the trust will be deemed as settlor interested trust, will the beneficial owner be taxed on income generated by the trust assets on arising basis. Many thanks.

[maths]

For CGT purposes the settlor of the trust will be the shareholder of the company even though the property was provided by the company.

No IHT consequences arise (ie no apportionment to shareholder); shareholder is not settlor for IHT.

[AGoodman]

If ever there was a question that required proper (paid for) advice, this sounds like it.

maths is absolutely correct in what he says but the rules and future scenarios around this are extremely complex, ever changing and depend on facts you may have not expected to be a factor.

Please ensure you take advice form somebody with a full knowledge of the facts. You really do not want to trigger unexpected liabilities or find yourself unable to use the trust as you would wish without triggering substantial taxes.