Taxation of trusts—inheritance tax

FORTHCOMING CHANGE: Abolition of non-dom regime and introduction of residence-based IHT regime.

At Autumn Budget 2024 on 30 October 2024, the Labour government confirmed that it will proceed with plans of the former Conservative administration to abolish the remittance basis of taxation and replace it with a residence-based regime, to commence on 6 April 2025. The government also confirmed its intention to move to a residence-based regime for inheritance tax. The changes will also affect the rules determining excluded property status, the Abolition of protected settlements status of offshore trusts, and changes to overseas workday relief.

For information on these changes, including draft legislation published with Autumn Budget 2024, see: Autumn Budget 2024—Private Client analysis — International, Autumn Budget 2024 (paras 2.56 and 5.51), OOTLAR (para 1.3) and TIIN: Reforming the taxation of non-UK domiciled individuals.

Tax—introduction and background

An introduction to the taxation of trusts

The direct taxes which apply to trusts are the same as those that are relevant to individuals (namely income tax, capital gains tax (CGT) and inheritance tax (IHT)). The application of these taxes differs depending on the type and terms

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