LS Legal News Bulletin
UK General Election 2024: Tax Implications for "Non Dom" and Offshore Trusts
Monday 3rd June 2024
Prime Minister Rishi Sunak has requested the dissolution of Parliament for a General Election set for 4th July.
Consequently, Parliament will cease operations on 30th May, resuming only after the new Government is formed. The political landscape post-election remains uncertain, recalling the coalition negotiations of 2010. However, it is expected that any tax changes from the new Government will likely not be implemented until 6th April 2025, though this is not guaranteed.
The tax laws as they stand remain unchanged from the pre-2024 Budget. We have insights into the potential tax policies of both the Conservative and Labour parties, albeit without seeing any draft legislation. Regardless of the election outcome, the following strategies are recommended for those affected:
Recommended Actions for Non-UK Domiciled Individuals and Trustees
Establish Offshore Trusts: Consider creating settlor interested or non-settlor interested offshore trusts to preserve wealth for future generations.
Clean Capital Creation: Generate clean capital from trusts containing historical income and gains to facilitate smoother wealth management.
Rebase Non-UK Assets: Rebase non-UK capital assets to their current market value. This can be achieved through simple gifting strategies.
Tax Credit Optimisation: Ensure that income from offshore trusts or their subsidiaries, which has already been taxed elsewhere, can be utilized by beneficiaries in a way that allows for tax credit claims.
Each individual's circumstances are unique, and numerous other opportunities might exist, especially for settlors who are, or may become, non-UK residents. It is crucial to act promptly; waiting until 6th April 2025 will be too late.
Non-UK domiciled individuals and trustees of offshore trusts should proactively consider the above strategies in light of the upcoming General Election and potential tax law changes.
