My client (UK res and deemed dom) is a life tenant of an offshore trust (LIT) holding UK residential property which is occupied by my client on a rent free basis. The LIT was settled by my client’s nom dom and non res father (now deceased).
There are no pools of relevant income or gains in the LIT.
The funding for the purchase of the UK residential property was provided by interest free loan from an offshore discretionary trust (DT) of which my client is a potential beneficiary. Again the DT was settled by my client’s nom dom and
non res father (now deceased). There are large pools of relevant income and gains in the DT
My query is
is my client indirectly receiving a benefit from the DT. i.e. the benefit of the rent free occupation could potentially be matched with income and gains in the DT or,
is the LIT receiving a benefit for the interest free loan which is matched with income and gains in the DT. If so do the matched income and gains form part of the LIT’s pools with the benefit of the rent free occupation being matched
Could any matching issues be avoided if the loan is made interest bearing with the interest rolling up?
Berg Kaprow Lewis
T ** ** 0208 9229363