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HMRC internal manual

Compliance Handbook

How to do a compliance check: starting a compliance check: offshore structures involving Trusts or companies

Offshore arrangements by individuals often involve the use of an offshore Trust or company.

The settlement of assets into Trust may well have an immediate Inheritance Tax (IHT) consequence, see IHTM42000, as well as further liabilities at the ten year anniversary and on assets leaving the Trust. Employee Benefit Trusts (EBT) are covered separately at IHTM42900.

Transfers involving companies can also give rise to an IHT charge, see IHTM14851.

For there to be an IHT charge there has to have been a transfer of value such that someone’s estate (their overall wealth) has diminished because of the transfer, see IHTM04054.

Equally, income tax charges can arise to a UK resident individual as a result of a transfer of asset which results in income payable to a person abroad, see INTM600050. Furthermore, there may be capital gains tax consequences where a UK resident individual is the settlor, see CG38430, or beneficiary of an offshore Trust, see CG38570.

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