TSEM10460 | Non-resident trusts: beneficiary’s chargeability - capital distributions made to beneficiary

If capital distributions are made to a beneficiary - not being the settlor, or his spouse or civil partner - by the trustees of a non-resident trust, you need to consider:

• the application of the settlements legislation ITTOIA05/S629, where the beneficiary is a minor unmarried child of the settlor (TSEM4300);

• the application of the Transfer of Assets Abroad legislation ITA07/S731 (INTM601400) where income payable to a person abroad (which includes trustees of a non-resident trust and any non-resident company underlying a trust) may be chargeable to tax on the beneficiary;

• the application of the Capital Gains Tax anti-avoidance legislation TCGA92/S87 (CG38570c) where capital gains of the non-resident trust have not been charged to Capital Gains Tax on the trustees (TSEM10265), and may be attributed to the beneficiary as a result of the capital payment.

A non-resident trust may give details of such capital distributions on, for example, a completed trust Return or form 50(FS) (TSEM10130).