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Where Taxpayers and Advisers Meet

Offshore assets transfered to a UK Trust via an aunt

kebata
Posts: 27
Joined: Tue Feb 21, 2012 7:10 am

Offshore assets transfered to a UK Trust via an aunt

Postby kebata » Fri May 24, 2019 5:49 pm

I am an non dom resident in UK with a holiday flat in Hong Kong which I am proposing to sell and declare the Capital Gain to HMRC. The residual value of the sale I intend to pass to my grandchildren by setting up two UK trusts whereby I gift in Hong Kong a share to my daughter and son ( both of them resident in UK but non doms) for them to establish UK trusts for their nieces and nephews. My objective is for me to avoid the 7 year IHT rule - there is a better chance for my son and daughter to survive the seven years! Would this course of action be permitted under the rules relating to indirect transfer of assets to grandchildren.


The alternative would be for me to set up an offshore trust in Hong Kong. In which case could the trustees be UK based - such as myself and my wife? In this case it would be my intention to remit income to the UK annually ( paying UK tax) and distribute to beneficiaries.

Grateful for your advice

AnthonyR
Posts: 273
Joined: Wed Feb 08, 2017 2:33 pm

Re: Offshore assets transfered to a UK Trust via an aunt

Postby AnthonyR » Fri May 31, 2019 1:33 pm

How long have you all been resident in the UK and how much are you looking to settle into trust? If you have been in the UK for more than 15 years you may be deemed domicile. What's the intention with the funds are they going to be brought into the UK and invested into UK assets?

If you are still non-domiciled and the funds are substantial enough it may be sensible to look at setting up an offshore trust, but you would not be able to be trustees as the residence of the trust is determined by it's trustees - you would need professional trustees.

I would suggest this is a situation where paying for proper advice is likely to be the best course of action as it's a complex area, particularly if you're considering an offshore trust.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk


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