Could your clients benefit by migrating their offshore trusts to the UK?
Before the introduction of anti-avoidance legislation in the early 1990s, there could be significant benefits in setting up an offshore trust, or taking an existing UK trust offshore, not least being the ability to realise assets without payment of UK capital gains tax (CGT) which was levied at a top rate of 40% at the time.
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Whilst perhaps some time ago, in 2016 the then housing minister suggested that inequality between the so-called baby boomers and the younger generation might be reduced if parents were to leave their properties to their grandchildren (rather than to their children) in their Wills.
A problem with the current rules is that they can lead to an excess charge to tax if a large withdrawal is made in the first years that the policy is held.
Read more on Update on the taxation of life insurance policies
In making any decision on behalf of a donor, the Mental Capacity Act 2005 requires the attorney to consider what would be in the donor’s best interests.
