Finance Bill 2017. Income Tax on deemed benefit on availability of property overseas

Without stretching others’ patience in these troubled times and waters, perhaps I can suggest the following inhe light of the released drafting of the 2017 Finance Bill.

The Income Tax and Capital Gains Tax definitions of settlements are very different to those in s.43 ITA.

For example, it is accepted that a usufruit dismemberment is not a settlement for CGT purposes. However the proposal I am making is simply for Civil Law jurisdictions which have the concept.

I am addressing this to High Net Worth Individuals with significant residential properties available to them outside the United Kingdom which may be structured through corporates, including SCI’s and similar types of personal companies, who may become DD’d as of April 2017.

Those with either i) UK domiciliaries of origin returning or “being returned” to the UK - the Revenants - or ii). those who have become ensconced here after 15 years residence might consider whether extracting a usufruct from the structure would be of assistance, as the carve out of this right will give a direct right of occupation and a few other things such as rights to rental income, outside the deemed benefit rules which will become applicable as of April 2017. I do not think even the Chancellor is yet considering taxing individuals on a deemed benefit arising from the legal property right to occupy or for that matter to occupy one’s own property. That was a thought that was floating around the Louvre, now Bercy in the 1980s.

This is but one of the issues which the Bill raises.

However, advice will be needed on the drafting of the conveyance of the right under the foreign, civilian, law, so as to ensure that no settlement under s.43 ITA 1984 might be considered to be created by mistake, The advantage being that there is no transfer of the extinction of a usufruit. It is neither a foundation or an anstalt for those who have a copy of Standing Committee A February 17th 1975 …

I do not propose to go any further with this posting. but, if anyone needs assistance with its implementation, I can be contacted on or + 44 (0)1534 625879

Peter Harris