Moving a Trust Fund to the Isle of Man

Trusts Discussion
1

I have an estate where the deceased died domiciled in England and Wales. The Executors and Trustees A & B live in England and the Isle of Man respectively. C is the daughter of B so also lives in the Isle of Man. C is a beneficiary of the Will who is currently a minor and will inherit subject to her attaining the age of 21. The estate is still in the course of its administration but her inheritance is likely to the in the region of £50,000.

A has indicated that he wishes to retire as a Trustee appointing B’s wife who (also resident in the Isle of Man) in his place. B has informed me that he has registered the trust in the Isle of Man and has a letter from the Isle of Man Treasury confirming this.

What are the potential tax and compliance implications of this? Can we simply pay C’s share to B and his wife as the Trustees once the Deed of Retirement and Appointment has been completed?

2

Principally just a CGT deemed disposal but if the trust fund is cash, that’s going to be irrelevant.

Just don’t forget that IHT will still apply to the trust - which probably won’t be an issue given the value and/or terms.

You may, in theory, need to register the trust under the TRS for one year for the moment it is a UK trust (yay!).