STS (Europe) Limited provide specialist support to tax advisors, accountants, trustees and individuals in the form of a bespoke computational package. The service is designed to reduce time spent on number crunching, overheads and staff training therefore, enabling increased productivity.
Our team of tax analysts can also produce forensic analysis to assist in tracing assets/monies through bank accounts of individuals, companies and trusts in cases involving bribery, corruption and money laundering. The process includes detailed computational analysis of complex data which is the presented in a way that is easily understandable for both professionals and clients.
We have an established connection with offshore trusts companies, providing trust computations in relation to UK tax matters. These service provided to offshore trust companies currently include UK trust tax returns, ATED returns, as well as any ongoing HMRC enquiries. One area of particular interest for offshore trust companies is the computations for UK matching rules which is explained in more detail below.
Computations for UK Matching Rules
On occasions where s720 ITA 2007 (Transfer of Assets Abroad) does not apply to a settlor, trustees must consider the effects of s731 ITA 2007 onwards. Any beneficiary who is UK resident will have a UK tax charge should they receive a distribution matched with relevant income or capital gains that has been generated within the trust.
The UK tax charge is generated in the year the distribution is made, not the year the income or capital gains were generated within the trust. The computation is essential for offshore trustees, who have current or potential future UK resident beneficiaries, in order to ensure UK tax compliance.
STS (Europe) Limited offer a service for ‘Stranded Trusts’. A ‘Stranded Trust’ is an offshore trust where historic income and capital gains have not been monitored throughout its life. Although the income or capital gains generated may not be representative of the entire distribution, HMRC will enforce the highest rate possible on the full amount as trustees cannot accurately determine the composition of the distribution made.
Calculating the Relevant Income and Capital Gains Pools
Where documents are available from the initial settlement of the trust, a comprehensive computation analysis of the accounts will be completed. To ensure a precise and accurate result, analysis of all transactions and investments made during the life of the trust will be done. Results from this will provide the current value of relevant income and stockpiled capital gains within in the trust at this time.
As it is imperative that offshore structures maintain accurately calculated pools, STS (Europe) Limited will bring income and capital gains values up to date and enable trustees to make distributions to UK resident beneficiaries that are correctly matched.
Going forward, it will enable trustees to make sound tax planning, such as making capital distributions to utilise any beneficiaries unused Annual Exemptions or create accounts enabling them to monitor the relevant income and capital gains on an ongoing basis.
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