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The Finance Act 2006 made some changes to the trustee residence rules, with a common test being introduced from 6 April 2007 for both income tax and capital gains tax.
The rules include the provision, TCGA 1992, s 69(2D) and ITA 2007, s 475(6), that a trustee will be treated as UK resident (and therefore, if he is the sole trustee, the trust will be taxed as a UK trust) when the trustee acts as a trustee in the course of a business, which he carries on through a 'branch, agency or permanent establishment' in the UK.
HMRC have published draft guidance on the application of these residence tests in relation to overseas trust companies.
Comments on the guidance should be sent by 13 March 2009 to CAR Trusts, IHT & CGT Policy Team, HMRC, Room G45, 100 Parliament Street, London SW1A 2BQ, or by email via the website.
