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It transpires that my UK resident and domiciled individual client set up a trust in the Channel Islands through the subsidiary of a UK bank in the early 1990s. No one now seems able to explain the rationale behind the trust's creation — certainly not my client. Cash of some £2 million was settled, most of which has been earning interest on deposit.
It transpires that my UK resident and domiciled individual client set up a trust in the Channel Islands through the subsidiary of a UK bank in the early 1990s. No one now seems able to explain the rationale behind the trust's creation — certainly not my client. Cash of some £2 million was settled most of which has been earning interest on deposit.
The trust is discretionary although the settlor was and is one of the named discretionary beneficiaries. It appears to me that rather than minimising potential tax liabilities this structure has created extra ones. I believe that despite my client's discretionary interest in the trust the initial sum settled is an inheritance tax lifetime chargeable transfer with tax at 20%.
Furthermore because of my client's interest any income will be assessed on him as will any capital gains realised by the...
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