A discretionary trust was created 19 years ago by a person who was not domiciled in the UK. He died, still non dom.
The assets he put assets into the trust were invested in Jersey, - until 5 years ago.
The trust now holds the assets in the UK - around £400,000
If, in a year’s time, the trust still holds those assets, are they still excluded property? Or will they have a 10 year charge, based on the excess over £325,000?
And, if there is an exit charge, later on, I assume this applies regardless of where the beeneficiary i resident.
The deceased died in Jersey in 1999.He was also tax resident there having moved to Jesery in the late 1980’s.
At the time the trust was set up the cash was invested in overseas assets. It’s only in the last 5 or six years the trustees have moved the investments into UK equities by selling the overseas assets.
Surely the trust could not have been created 19 years ago if the settlor died in 1999?
UK situs assets are not generally excluded property so yes, there is likely to be a 10 year anniversary IHT charge and potentially an exit charge if any capital is distributed. Presumably the trustees are non-UK resident so why did they decide to invest in the UK. Is the income distributed and if so, is that to UK resident or non-UK resident beneficiaries?
Maxine Higgins
TC Citroen Wells
P.S. Just because he moved to Jersey in the 1980s and remained there until he died, does not automatically make him non-UK domiciled, if he previously had any connection with the UK, or indeed was born there.