Non-resident trusts: residence rules: what is a non-resident trust?
A non-resident trust is a trust which under the income tax and capital gains tax rules is not resident in the United Kingdom. The Income Tax rules for deciding the residence status of a trust differed from the Capital Gains Tax rules for periods to 5 April 2007. From 6 April 2007 there is a common residence test for both taxes.
For guidance on the residence rules for trusts for periods to 5 April 2007 see TSEM10010 - TSEM10015.
For guidance on the residence rules for trusts for periods from 6 April 2007 see TSEM10020 - TSEM10030.
The Income Tax and Capital Gains Tax consequences for trustees, settlors and beneficiaries of non-resident trusts are considered in:
TSEM10100+ - new non-resident trust
TSEM10200+ - trustees’ chargeability
TSEM10300+ - settlor’s chargeability
TSEM10400+ - beneficiary’s chargeability
For Inheritance Tax purposes, the residence of a trust is relevant only in determining whether or not the settlor can be liable for the payment of any tax - see IHTM30111.