ATED charge and corporate trustee - USERNAME: wington - 21/04/2016

Tax Question:

A trust (corporate trustee) holds an offshore co which owns a flat subject to 3,500 ATED. Flat is occasionally used (rent free) by non resident individual. Can situation be improved by de-enveloping or otherwise?

Answer:

It could be. Ownership through an offshore discretionary trust (even with a corporate trustee) can be a good option as it avoids the ATED charge, although there would be a 6% Inheritance Tax charge on the net value of the property (i.e. offsetting a mortgage on the property) on each 10-year anniversary. There would also be the nil rate band to take into account.

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