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In the third of our series of case studies as part of MSI Awareness month we turn to the thorny issue of trusts. Trusts are already one of the more complex areas of UK law and they don’t get any easier when cross border issues are involved. Not all countries recognise trusts in the way that we do as they have different legal systems, making local advice essential. This is where MSI Global really helps our clients.
A Tale of Two Cities:
Not all countries look as favourably on trusts as we do and if a beneficiary goes to live or work abroad the trustees need to know as such a move could create additional reporting requirements for them. France in particular has very strict reporting rules.
Mr Dickens had been a beneficiary of a UK trust for a number of years. When he moved to France we alerted the trustees to their reporting responsibilities in France – and the heavy fines if they failed to comply. We also highlighted that now a beneficiary had tax residence outside the UK, it was in his interests to ensure that consideration was given to how payments from the trust would be taxed in his new country.
We introduced the trustees to our MSI member based in Paris. He worked with us to decide the most tax efficient way of continuing to get funds out of the trust to Mr Dickens factoring in both French and UK side.
Our MSI contact also explained to the trustees that as they had a beneficiary now living in France, they would need to report the existence of the trust to the French authorities. Each year we supply the necessary information from the trust to the MSI advisor. This way the trustees can be sure they are compliance in both France and the UK and are protecting the trust assets and themselves from heavy fines. The trustees also now keep a close eye on the other beneficiaries and where they are choosing to live.
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Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW