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We have recently taken on a client who has been resident in the UK for
18 years but who we consider to be domiciled in Croatia.
On the death of her father in 2008 she inherited some properties in Croatia yielding annual rents of about £22 000. She does not need the income and makes no remittances to the UK.
Her mother who is resident in Croatia agreed to deal with all matters relating to the properties and our client gave her power of attorney (drawn up in Croatia) under which the mother manages the properties ‘on her own behalf and for her own benefit’ although the income is paid to an account in Croatia held in our client’s name.
In apparent full knowledge of the facts the Croatian tax authorities deal with this arrangement by having the mother include the income in...
