Relevant Property - Non Domicile changes

Trusts Discussion
1

Has anyone dealt with a scenario where the trust (offshore company) held some property within the UK which became part of the relevant property regime after the rule change in April 2017 and that UK property was appointed from the trust a short time later (3 weeks in this instance)?

If so would you deal with the exit charge in the usual manner?

If we recalculate the actual rate as per April 2017 due to there being no complete quarters between the date the property became relevant property and the exit it seems that there would again be no tax due but as the legislation has not yet been completed I cannot be sure.

Surely the legislation is not intended to be retro-active?

Any thoughts would be welcome

L Driscoll
Watts Gregory LLP

2

Do you mean the property was de-enveloped 3 weeks after 6th April 2017?

If this is the case then the property is still within the settlement i.e. now owned by the trust, there should not be any exit charge unless the property is sold i.e. it’s no longer in the settlement/structure.
The sales proceeds continue to be relevant property for further 2 years.

Care should be taken however, regarding how the 3 week would interact with the 10 year anniversary of the trust.

Sameera Nathoo