Over 25 years ago the capital gains tax settlor charge was introduced for offshore trusts. Although the new charge was targeted at trusts established on or after 19 March 1991, those set up prior to that date could also fall foul of the new rules if they were 'tainted' by property being added to the trust. Over the course of time these tainting rules have become less relevant. However, following the enactment of Finance (No.2) Bill 2017 on 16 November 2017, tainting is set to become a hot topic once again due to the introduction of 'protected trust status' which will apply to certain offshore trusts.
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© Farrer & Co LLP, December 2017