CGT and the appointment of a non resident trustee

The background is as follows: a Scottish Will, but probate obtained on basis of deceased’s English domicile. The Will provides that the residue is held for the deceased’s minor child contingent on attaining the age of 21, but income can be used for maintenance education and benefit, and capital can be advanced. The minor child is resident in Denmark.
The Will Trust is subject to Scots law.
The Will trust has not yet been funded (everything on hold in light of a 1975 Act claim).
The current trustees of the as yet unfunded Will trust are 3 UK resident individuals.
The plan is that 2 additional trustees will be appointed and one of the existing trustees will retire. Of these 2 trustees to be appointed, one is UK resident, the other is resident in Sweden. Under Scots law, residence abroad is no bar to trusteeship (although by statute it is a ground on which in certain circumstances the court may remove a trustee).
The Swedish resident is being asked to confirm that there are no adverse consequences for herself or the trust as far as Swedish law is concerned (given how Sweden may or may not view the concept of a trust).
My question is in relation to UK CGT: Presumably since all other trustees are resident in the UK, a deed of appointment where by 2 additional trustees are appointed (1 UK resident and 1 non-UK resident) and the retirement of one UK resident trustee will be neutral as far as CGT is concerned. The trust has not migrated, only 1 out of the 4 trustees would be resident abroad, and presumably there would be no liability for the past trustee under s82 TCGA 1992. I think I have answered my own question but should be grateful for any comments anyone has.

Harriet Murray
Gedye & Sons

TCGA 1992 s69 provides for trustee residence determination.

For CGT, UK residence arises if all the trustees are UK resident or if at least one trustee is UK resident and one is non-resident and in addition a settlor was resident or domiciled in the UK (at a time which is a relevant time in relation to him, namely, immediately before death if the trust arose on the settlor’s death).

In the alternate, a trust is non-UK resident if all trustees are non-resident and the settlor is resident or domiciled in the UK. Or, if the settlor is both non-resident and non-domiciled immediately before death then one non-resident trustee makes the trust non-resident.

In your case due to the UK domicile status of the settlor and not all the trustees are non-resident the trust remains resident. Hence, no emigration charge arises in which case the retiring trustee has no exposure to CGT arising in the tax year of appointment of the non-resident trustee. It may also be worth noting that split year treatment (applicable to individuals) is inapplicable to trusts.

Malcolm Finney