TSEM1460 - Introduction to trusts: new trusts: trustees’ residence for capital gains tax purposes: periods up to 5 April 2007
The basic position
The Taxation of Chargeable Gains Act treats trustees as a single and continuing body of persons. That body is resident in the United Kingdom for capital gains tax purposes unless
- all, or a majority, of the trustees are regarded as not resident in the UK and
- the general administration of the trust is ordinarily carried on outside the UK.
If there is an equal number of resident and non-resident trustees the trustees are resident for capital gains tax purposes.
Change in residence status of individual trustees
If trustees as a body are regarded as resident for any part of a year, they are taxable for the full year. Trustees do not qualify to be taxed on a ‘split-year’ basis for capital gains tax purposes.
Professional trustee
A professional trustee, who is resident in the UK, can be regarded as non-resident for capital gains tax purposes.
The trustee must
- carry on a business that includes the management of trusts, and
- act as trustee in the course of that business. This will usually be an accountant, solicitor or bank. The trustee must not be an employee or acting in a personal, rather than a professional, capacity.
Whenever funds were settled, the settlor must have been
- not resident in the UK and
- not ordinarily resident in the UK and
- not domiciled in the UK.
