Despite numerous pieces of anti-tax avoidance legislation, holding assets in an offshore trust can still have tax advantages for a UK resident but non-UK domiciled, although the tax implications will depend on a number of factors.
In certain circumstances, capital gains and foreign sourced income can be rolled up tax free and foreign assets settled into trust whilst the settlor was non-domiciled will remain outside the UK inheritance tax net.
If the settlor (or his immediate family) can benefit from the trust or distributions are made to a UK resident beneficiary, then there are further considerations and UK tax may payable, due to the application of the anti-avoidance legislation.
In the right circumstances an offshore trust can be an effective and tax efficient asset protection and succession planning vehicle. However, the law concerning trusts and their taxation is complex and planning should not be undertaken without obtaining professional advice.
