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Loans from offshore trusts
In Cooper v Billingham [2001] STC 1177 it was held that, where non-resident trustees made interest-free loans repayable on demand to a beneficiary, this was the provision of a benefit from the trust within section 97(4), Taxation of Chargeable Gains Act 1992. Accordingly the value of the benefit was a capital payment for the purposes of the capital gains provisions relating to offshore trusts.
Loans from offshore trusts
In Cooper v Billingham [2001] STC 1177 it was held that where non-resident trustees made interest-free loans repayable on demand to a beneficiary this was the provision of a benefit from the trust within section 97(4) Taxation of Chargeable Gains Act 1992. Accordingly the value of the benefit was a capital payment for the purposes of the capital gains provisions relating to offshore trusts.
The question remains as to how the value of the interest-free loan should be established. The Revenue has stated that it considers the value of the benefit conferred to be the difference between a commercial rate of interest and the actual interest paid on the loan. However in practice it will accept computations based on the official rate of interest for the purposes of section 160 Taxes Act 1988.
The principle applies...
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