UK Trust & Inheritance Law Amended to Catch Domiciled Settlors

The UK government is looking to counter legislate in the recent ruling in Barclays Wealth Trustees & Drelan v HMRC whereby the assets of a Jersey discretionary trust were found not to be valid or relevant property as per the Finance Bill 2006.

The ruling effectively makes exempted trusts where the settlement is outside the UK and the settlor is not UK-domiciled exempt from reporting obligations and inheritance tax. However, the proposed trust and equity legislation will hold that all property added to an excluded property settlement after the settlor becomes UK domiciled, will be subject to UK inheritance charges accordingly.