STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of 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, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. Capital payments made by an offshore trust to UK resident-domiciled beneficiaries are governed by a series of 'tax hierarchy' rules. The order in which to consider how a benefit from an offshore trust is to be treated for tax purposes is as follows:

ARCHIVED: This archived Practice note summarises the three main reliefs afforded to UK resident non-domiciled individuals receiving capital payments (ie payments subject to TCGA 1992, s 87 or Sch 4C) from offshore trusts, including rebasing elections, the exemption of pre-6 April 2008 capital payments and section 1(3) amounts and the remittance basis. As discussed in the UK resident non-domiciliaries—tax planning Practice Note, non-domiciled individuals resident in the UK can claim to be taxed on the remittance basis. This means that only their UK source income and gains and the foreign income and gains they remit to the UK are subject to UK taxation. Remittance basis users are therefore exempt from UK tax on foreign earnings that are kept outside the UK. Until 6 April 2008, UK resident non-domiciled individuals were not taxed under section 87 or Schedule 4C of the Taxation of Chargeable Gains Act 1992 (TCGA 1992). In effect this meant that trust gains could be remitted to the UK by a beneficiary

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of 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, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. When is Sch 4C in point? A Sch 4C pool, ie a pool of gains to which Schedule 4C to the Taxation of Chargeable Gains Act 1992 (TCGA 1992) applies, is created when the trustees

Major changes to the taxation of offshore trusts were introduced in 2017 and 2018. These changes are summarised in Practice Note: Changes to the taxation of offshore trusts from 6 April 2017 [Archived]. An offshore trust means a trust or settlement whose trustees are not resident in the UK for tax purposes. For information on the residence of settlements, see Practice Note: Tax position of non-resident trusts. The tax implications of making a capital payment from an offshore settlement to a beneficiary (be it an individual or a company) are covered in sections 87–97 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992). The aim of these particular provisions is to prevent UK residents avoiding capital gains tax (CGT) by structuring investments such that capital gains arise to trustees of a non-resident settlement rather than themselves personally. For the purposes of this regime, the term 'settlement' bears the income tax anti-avoidance definition given in the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), s 620 (s 97(7)). It includes

This Practice Note has been archived and is not maintained. Offshore income gains (OIGs) are gains realised on the disposal of interests in offshore funds which are either: • non-distributor offshore funds, or (after 1st December 2009) • non-reporting offshore funds See Taxation of offshore funds—overview for an introduction to offshore funds and the various anti-avoidance measures that the UK has introduced with the aim of limiting the tax advantages that could accrue to individuals who invest in offshore funds. A key feature of the offshore fund regime is that capital gains are taxed as income. However, the offshore gain remains a capital gain for trust law purposes. The offshore funds regime legislation is found in: • Taxation (International and Other Provisions) Act 2010, ss 354–363A, Pt 8, and • The Offshore Fund (Tax) Regulations 2009, SI 2009/3001 (as amended) Note that the Offshore Fund (Tax) Regulations 2009 have not been amended to reflect the changes made to Part 1 of the Taxation of Chargeable Gains Act 1992

ARCHIVED: This archived Practice Note discusses the advantages and disadvantages for trustees of making a rebasing election under Finance Act 2008, Sch 7 Pt 2, para 126 and the steps involved. It also covers rebasing elections under section 3 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) in relation to gains of underlying companies, TCGA 1992, s 43 in relation to assets derived from assets and transfers between trusts. The consequences of rebasing elections for remittance basis users is also covered. Abolition of remittance basis from 6 April 2025 The remittance basis of taxation was abolished for UK resident non-domiciled individuals from 6 April 2025. The last year for which the remittance basis can be claimed is the 2024–25 tax year. From 6 April 2025, a new four-year regime, colloquially referred to as the foreign income and gain (FIG) regime, will be available providing 100% relief on eligible FIG for new arrivals to the UK in their first four years of tax residence, provided they have not been UK tax resident

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of 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, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. This Practice Note briefly summarises the advantages and disadvantage of trustees using a company to hold investment assets, rather than directly, and covers the position of both UK resident and domiciled individuals and UK resident, non-domiciled individuals. Non-tax reasons for using a holding company While

STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of 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, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. The trustee borrowing rules were introduced in 2000 to counter a specific planning scheme known as a 'flip-flop'. The scheme allowed the settlor of an offshore trust to avoid a charge to tax under section 86 of

Capital payments are generally taxed by matching them against available relevant income (ARI), offshore income gains (OIGs) and capital gains in that order such that, if the trust does not have any ARI, distributions are matched to OIG amounts and then finally to section 1(3) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) (formerly s 2(2)), amounts under TCGA 1992, s 87 or Sch 4C. For discussion of OIGs, see Practice Note: Offshore trusts—offshore income gains (OIGs). For discussion of matching capital payments, see Practice Notes: Offshore trusts—matching capital payments—section 87 TCGA 1992 and Offshore trusts—matching capital payments where the trustee borrowing rules apply—Sch 4C TCGA 1992. However, where there has been a transfer between settlements, the OIG amounts and TCGA 1992, s 1(3) amounts in each settlement are altered. As such, the tax treatment of a payment made from either settlement in the year of the transfer or subsequent years is also likely to be altered. What is a ‘transfer’? While a ‘transfer’ itself

For further practical guidance on key legal issues in the wind sector, see also textbook: Wind: Projects and Transactions. What is offshore wind? Offshore wind refers to wind turbines that are installed in bodies of water, typically the sea. Wind turbines harness the energy of moving air to produce electricity. Offshore wind has the capacity to generate higher volumes of electricity due to more consistent wind speeds occurring offshore compared to on land. Although there are several similarities, offshore wind turbine technology is significantly different from land-based wind turbine technology. Offshore wind turbines components Early offshore wind farms used adapted onshore wind turbines; now offshore wind turbines are designed specifically for offshore deployment and have larger capacities than the largest onshore type, achieving 8–12 MW (megawatts), as opposed to 3–4 MW range onshore. There are currently larger onshore and offshore wind turbines under development and construction. Similarly to onshore, the main components of an offshore wind turbine are blades that rotate around a horizontal axis connected to the hub, linked by a shaft to the nacelle, and the

The relocation of work that a law firm or in-house team would normally perform to another country.

Most projects are underpinned by a complex web of contractual relationships between all the parties involved in the project (eg the project company, equity investors, contractors, sub-contractors, offtakers and suppliers). These documents are generally referred to as the 'project documents' (see: Project documents—issues for lenders—overview). In projects involving the production or exploitation of a product (eg a power project or a mine project), the offtake contracts are some of the principal project documents. What is an offtake contract? An offtake contract is a contract under which a third party (the Offtaker) agrees to buy a certain amount of the product produced by a project at an agreed price. The product is often a commodity such as oil, gas, minerals or power. The purpose of an offtake contract is to: • secure a predictable revenue stream for the project, and • ensure that there is a guaranteed buyer for project production (particularly where demand for the product is likely to fluctuate) It is not always necessary for the project company to