Trusts still have an important role to play in onshore tax
planning, as acknowledged by the British government recently.
Advisers based in the UK were recently shocked by the
government's announcement of far-reaching changes to the way
in which non-domiciled individuals resident in the UK will be
taxed.
However, the UK Government confirmed in connection with the
planned changes that any non-UK assets placed into trust before
April 6, 2025 by non-UK domiciled settlors will remain outside of
the scope of the UK inheritance tax regime.
That is significant, as the standard inheritance tax rate in the
UK, subject to various exclusions, is 40 per cent.
Announcements such as these highlight how useful Bermuda trusts
can be as part of legitimate estate planning, with the use of the
trust vehicle as a planning tool being contemplated by the UK
government itself in this case, and assets in such vehicles being
protected from certain tax exposures.
