Money from offshore trust

Lucy_rose

Hi, just looking for some advice. I've recently been informed that I'm due to inherit some money from an offshore trust, legally this distribution isn't classed as inheritance - I believe it will be a combination of income or capital gains. As it's coming from the channel islands to the UK I'm assuming there's going to be tax implications - but I'm totally out of my depth and wondered if anyone could shed any light or recommend a particular type of accountant or tax advisor that I need to get in touch with. 

DRS1

https://www.step.org/about-step/public

You probably need someone who belongs to STEP - Society of Trust and Estate Practitioners.  Hopefully the link will help you search for someone near you.

However the Trust must have been set up by someone and that someone must have had legal (and perhaps other) advice.  The Trustees will be able to tell you more and perhaps put you in touch with the right people who could advise you with knowledge of the background and who would know the UK tax implications of the distribution (it is usually UK law firms who use Trusts in the Channel Islands).

dunstonh

Is it an offshore trust or a trust using an offshore bond?

poseidon1

You need to answer @dunstonh's question, since the tax regime covering offshore  entities holding life assurance investment bonds in trust is completely different from offshore trustees holding a conventional stockmarket portfolio accruing income and capital gains over the trust period.

In the latter case, UK beneficiaries are taxable on portofolio gains and income accrued by the overseas trustees on a particularly complicated basis that requires the trustees to provide the  computations which would enable  you ( the beneficary) to submit an accurate breakdown of your distribution between taxable income and gains.

This is highly specialised work which requires the assistance of a STEP qualified Chartered Accountant steeped in the vagaries of offshore trust accounting and tax compliance. As such I would expect the offshore trustees to have retained the services of a UK tax specialist who should be able to assist you with your personal tax reporting obligations. 

If on the contrary this is a mere investment bond held in a channel Island  trust the tax outcome depends on whether the bond has automatically encashed on the death of the person who created the trust, or the bond remains intact and you have the option of receiving bond units to be cashed at your own convenience. The investment bond scenario does have its own complications, but with a far  wider knowledge base of tax  advisers that can assist.

Finally, I assume you are UK born and therefore do not claim non dom status for UK tax purposes.

Lucy_rose

Thank you so much for all of your suggestions and help. As this is so complicated and I'm totally out of my depth, I'm going to go ahead and ask for some assistance from the Trustees in picking an appropriate tax advisor. 
Have a good rest of your day.