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The tax benefits of using trusts outside of the UK are limited, finds JOHN WOOLLEY
KEY POINTS
- Anti-avoidance rules in ITTOIA 2005 s 624.
- Tax on assets transferred abroad.
- Little scope for capital gains tax planning.
- 2008 reforms.
- Inheritance tax.
People often associate the use of an offshore structure with tax efficiency. A UK resident investor can achieve legitimate tax deferral by using an investment in an offshore bond (that is not a personal portfolio bond) or in a non-reporting i.e. roll-up offshore fund.
As far as offshore trusts are concerned it is fair to say that in the past they have been used substantially as a means of capital gains tax avoidance.
However over the years the income tax and capital gains tax laws have caught up with these planning strategies so that it is now very difficult for...
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