Market leading insight for tax experts
View online issue

Deemed domicile legislation: trust additions and CGT commencement

printer Mail

The ICAEW has published HMRC’s replies to queries on the new deemed domicile legislation, particularly in relation to trusts. HMRC has confirmed that there will be a transitional window until 5 April 2018 for trusts to repay non-commercial loans in full, or convert them to commercial terms, to avoid these being treated as post-April 2017 chargeable additions to the trust.

Where the settlor has the power to revoke a trust to safeguard the position of beneficiaries, HMRC will not regard the failure to exercise such a power as amounting to an addition to the trust. In these circumstances, the trust would not lose its protection.

HMRC has also confirmed that matched payments made to non-residents before 6 April 2017 will be able to wash out pre-April 2017 gains; only unmatched payments will be disregarded under the CGT commencement provisions.

Read the full replies at