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Trust exit charges after Panayi

08 November 2017 / Lisa Macpherson
Issue: 4623 / Categories: Comment & Analysis
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This way out

KEY POINTS

  • Do exit charges represent a restriction on the EU freedoms of establishment and capital.
  • Effect of TCGA 1992 s 80 on trustees who move overseas.
  • Previous case law decreed that exit charges on a company were acceptable.
  • Panayi trustees asked whether exit charges should apply to trusts.
  • European Court said it should be possible to defer payment of charges.

For many years advisers have questioned whether the UK’s – admittedly few – capital gains tax exit charges are proportionate and legal or whether they represent a restriction on both freedom of establishment (Art 49 of the Treaty on the Functioning of the EU) and free movement of capital (Arts 63 to 66) – two of the EU’s four fundamental freedoms.

The UK has only four true exit...

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