INTM339550 - Double Taxation applications and claims: Applicants/claimants - Trusts: Claims by non-resident trustees of discretionary trusts

You may receive a claim or application from non-resident trustees of a discretionary trust. For specific information about claims by non-resident trustees see the country specific pages. If the trust’s entitlement to claim is not clear from previous papers, you will need to ask for details of the trust to establish whether relief is due. The necessary information is requested on the form 4467(trustee)/FD.

What to do if the settlor of a discretionary trust is not excluded from benefit under the trust

Where the settlor of a non-resident discretionary trust is not excluded from benefit under the trust, the trust may be subject to the provisions of ITTOIA05/S624. In this situation the trust may be described as a ‘caught settlement’. The settlor will be chargeable on the income of the trust as their own personal income, regardless of whether the income is accumulated or distributed.

Where we have a claim or application from trustees of a discretionary trust from which the settlor is not excluded from benefiting, Specialist Personal Tax, PT International Advisory will need to refer the papers to Specialist PT, Trusts & Estates for advice. They will also consider whether the settlor or the trustees need to make a UK tax return.

If the settlement is caught, a claim by the trustees will not be valid.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

What to do if one or more beneficiaries of the trust has a residential address in the United Kingdom

If the completed form 4467(trustee)/FD shows any beneficiaries with UK residential addresses, Specialist Personal Tax, PT International Advisory will refer the papers to Specialist PT, Trusts & Estates, who will consider whether the trustees will need to make UK tax returns.

What to do if all of the beneficiaries are resident in the same country as the trustees and the settlor of the trust is excluded from benefit

If all of the beneficiaries of the trust are resident in the same country as the trustees and the settlor of the trust is excluded from benefit, you can allow relief to the trustees.