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HMRC internal manual

Trusts, Settlements and Estates Manual

Non-resident trusts: residence rules: dual resident trusts

Trusts may be resident in the United Kingdom under UK tax law, and also resident for the same period in another country under that country’s rules - if so, they are dual resident.

If there is a Double Taxation Agreement with another country, it may have a ‘tie breaker’ provision. A tie breaker makes the trust a resident of one of the countries but this is only for the purposes of applying the provisions of the Double Taxation Agreement. The rules for determining ‘residence’ for the purposes of a Double Taxation Agreement can be complex. For trusts, the provisions look at where the effective management of the trust is situated.

If it is ‘dual resident’ the trust may be able to claim the exemption and reliefs from UK tax granted to residents of that other country.

Refer any case in which a trust claims to be dual resident for a particular year to Trusts & Estates Nottingham.