One Year On: The Impact Of The New Offshore Trusts Rules From A UK Tax Perspective—IFC Review
Partner Matthew Radcliffe has contributed an article to IFC Review exploring the impact of the UK’s April 2025 offshore trusts reforms, examining how the shift from domicile to residence-based taxation has reshaped the effectiveness and planning considerations for offshore trust structures.
Matthew outlines how the abolition of domicile and the move to residence-based rules have fundamentally changed the taxation of offshore trusts. UK resident settlors can now be taxed on trust income and gains even without receiving distributions, following the removal of protected settlement rules. He explains that while limited reliefs exist (such as the QNR regime and motive defences) they are narrow in scope. He adds that although the treatment of beneficiary distributions is broadly unchanged, planning opportunities remain, particularly for new UK residents, meaning trustees must carefully reassess existing structures under the new regime.
The reforms introduced by the UK government on 6 April 2025 heralded a fundamental shift in UK tax policy, centred around the near-wholesale excision of the ‘domicile’ concept from the UK tax code, and an abolition of sorts of the frenetically complex remittance basis regime.
The full article is available to read online from IFC Review here.
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About Matthew
Matthew Radcliffe is a partner in the private client team, advising on a broad range of UK tax, estate planning and cross border matters for internationally mobile and US connected clients, with particular experience in trust structuring, succession planning and the UK tax treatment of foreign entities.
