Q&As

In the context of a Tier 1 (Investor) initial application, what does the gifting of beneficial ownership mean? Does it mean that the monies now vest in the main applicant and that for tax purposes the main applicant will pay capital gains tax on realising any shares or can the tax burden be shared between the spouses?

read titleRead full title
Published on LexisPSL on 03/03/2020

The following Immigration Q&A provides comprehensive and up to date legal information covering:

  • In the context of a Tier 1 (Investor) initial application, what does the gifting of beneficial ownership mean? Does it mean that the monies now vest in the main applicant and that for tax purposes the main applicant will pay capital gains tax on realising any shares or can the tax burden be shared between the spouses?
  • What is beneficial ownership?
  • What form can beneficial ownership take?
  • How does the UK tax beneficial ownership?
  • How do the rules set out above interact with the Immigration Rules, Appendix A, para 61-SD?

In the context of a Tier 1 (Investor) initial application, what does the gifting of beneficial ownership mean? Does it mean that the monies now vest in the main applicant and that for tax purposes the main applicant will pay capital gains tax on realising any shares or can the tax burden be shared between the spouses?

What is beneficial ownership?

The English legal system allows for ownership of an asset (such as a house or money) to be split between legal ownership and beneficial ownership by way of a simple form of trust. Often, someone who owns as asset will own both the legal and beneficial ownership. However, sometimes these forms of ownership are divided for a variety of reasons.

For example, in the case of a trust, the trustees have legal ownership of the trust assets while the beneficiaries of the trust have beneficial ownership. The trustees manage the assets on behalf of the beneficiaries who are entitled to receive all the benefit from the assets. In short, the owner of the beneficial interest in an asset has the right to the full economic benefit of the asset in question (subject to the trustees’ rights to expenses and trust administration costs). These types of trust have a more complicated legal and tax position—for more information, see the Trusts topic and: Trusts—inheritance tax—overview and Trusts—income tax

Popular documents