TSEM10020 - Non-resident trusts: residence rules: trust residence for Income Tax and Capital Gains Tax purposes - periods from 6 April 2007
ITA/S474 and TCGA92/S69(2)
From 6 April 2007 the trustees of a settlement are treated as a single person for both Income Tax and Capital Gains Tax purposes and this deemed person (referred to below as 鈥榯he trust鈥�) is distinct from the actual persons (individuals and/or companies) who act as the trustees.
From 6 April 2007 a common residence test applies for both Income Tax and Capital Gains Tax purposes.
All trustees are resident in the United Kingdom
The trust is resident in the UK for Income Tax and Capital Gains Tax purposes.
All trustees are resident outside the UK
The trust is not resident in the UK for Income Tax and Capital Gains Tax purposes.
There is a mixture of resident and non-resident trustees acting at the same time
The trust is resident in the UK unless the settlor was:
- not resident in the UK and
- not ordinarily resident in the UK and
- not domiciled in the UK
at the time the settlor made or is treated as making the settlement and at any time when the settlor adds property to the settlement. If the settlement arises on a settlor鈥檚 death then the settlor鈥檚 residence and domicile status are considered immediately before the death (ITA07/S475(5) and ITA07/S476, TCGA92/S69(2B) and (2C)).
With the introduction of the non-UK domicile reforms from 6 April 2025,听if there is a mixture of resident and non-resident trustees acting at the same time consideration will no longer be given to the settlor鈥檚 domicile when considering whether the trust is resident in the UK. This will only apply for settlements created on or after 6 April 2025, or to settlements created before this date to which property is added after 6 April 2025. For settlements created before 6 April 2025 the settlor鈥檚 domicile will still be considered for the purposes of the test.听
Professional trustee resident in the UK
There is no special treatment for UK resident professional trustees.
Professional trustee not resident in the UK
A professional trustee who is not resident in the UK is treated as resident for Income Tax and CGT purposes if they are carrying on the business of a trustee through a branch, agency or permanent establishment in the United Kingdom. More detailed guidance on this point is available at TSEM10055.