³ÉÈËÓ°Òô

This guidance note details how UK resident settlors of non-resident trusts are taxed in the UK before 6 April 2025. The abolition of the domicile rules and remittance basis rules mean that the treatment after this date is different.

Where a UK resident settlor has created a non-UK resident trust, they may become personally liable to income tax or capital gains tax in relation to the trust’s income or gains, even if they do not receive a payment from the trust. The following legislative provisions levy a potential charge on UK settlors of non-resident trusts:

1. •

   the settlements code set out in ITTOIA 2005, ss 619–648 imposes an income tax charge on settlors with respect to income arising within a ‘settlor-interested’ trust. The provisions apply equally to UK resident and non-resident trusts

2. •

   the transfer of assets abroad code (TAAC) set out in ITA 2007, ss 714–747 imposes an income tax charge on settlors who may benefit from a non-resident trust as a result of a ‘relevant