Emigration of trusts—UK exit charges and post-emigration UK tax considerations
Emigration of trusts—UK exit charges and post-emigration UK tax considerations

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Emigration of trusts—UK exit charges and post-emigration UK tax considerations
  • How does a trust migrate?
  • Capital gains tax—exit tax
  • Other tax consequences of migration
  • When should a trust emigrate

BREXIT IMPACT: As of exit day (31 January 2020) the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law and will continue to submit to the jurisdiction of the Court of Justice of the European Union. The effect of this is discussed below.

This Practice Note considers the UK tax implications of a UK resident trust emigrating from the UK. Guidance on the ongoing taxation of trusts that are not resident in the UK can be found in the Offshore trusts—taxation subtopic.

How does a trust migrate?

In order for a trust to emigrate from the UK, the UK trustees are required to retire from their roles and new non-UK resident trustees must be appointed in their place. For information on changing trustees, see Practice Notes: Trustees—appointment of trustees and Trustees—retirement of trustees. For further guidance on trustee residence, see Practice Note: Tax position of non-resident trusts.

Trust emigration will be possible to the extent the trust deed gives the trustees (or some other person, eg the protector or settlor) the express power to appoint non-UK resident trustees. Courts will generally uphold the new appointment provided it does not result in adverse consequences for the beneficiaries.

If there is