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HMRC internal manual

Trusts, Settlements and Estates Manual

HM Revenue & Customs
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Non-resident trusts: beneficiary’s chargeability - capital distributions made to beneficiary

If capital distributions are made to a beneficiary - not being the settlor, or his spouse or civil partner - by the trustees of a non-resident trust, you need to consider:

  • the application of the settlements legislation ITTOIA/S629, where the beneficiary is a minor unmarried child of the settlor (TSEM4300);
  • the application of the Transfer of Assets Abroad legislation ITA/S731(INTM600030 - external users can find this guidance at where income payable to a person abroad (which includes trustees of a non-resident trust and any non-resident company underlying a trust) may be chargeable to tax on the beneficiary;
  • the application of the Capital Gains Tax anti-avoidance legislation TCGA/S87 CG38210 - external users can find this guidance at where capital gains of the non-resident trust have not been charged to Capital Gains Tax on the trustees (TSEM10265), and may be attributed to the beneficiary as a result of the capital payment.

A non-resident trust may give details of such capital distributions on, for example, a completed trust Return or form 50FS (TSEM10130).