Non-resident trusts

What ‘non-resident trusts’ means

For trusts created on or after 6 April 2025, a non-resident trust is usually a trust when:

• none of the trustees are resident in the UK for tax purposes
• only some of the trustees are resident in the UK and the settlor of the trust was not resident when the trust was set up or funds were added

The domicile of the settlor iswill no longer be a factor in determining the trust’s residence. However, the residence of the settlor may still be considered in certain circumstances.

A trust created on or before 5 April 2025, is usually a non-resident trust when:

• none of the trustees are resident in the UK for tax purposes
• only some of the trustees are resident in the UK and the settlor of the trust was one of the following:
  • not resident when the trust was set up or funds were added
  • not domiciled or deemed domicile in the UK when the trust was set up or funds were added

How to define domicile

Domicile is a common law concept inthat law. It links an individual to a territory wheresubject there’sto a single system of law.

Each individual has a domicile of origin at birth, usually linked to that of their father, but your domicile can change. 

Achange. A person is usually domiciled in the place that they consider to be their permanent home,home and where they have the closest ties. You can only have one domicile at any given time.

Who to contact if you’re setting up a non-resident trust

If you’re setting up a trust and you think it may be non-resident, you may need to register the trust.

Find out more about:

• about when and how to register a trust
• how.

  You can find out about what you need to register a trust as an agent

• how toor register a trust as a trustee

, such as details of the settlor, trustees, beneficiaries and assets.

To discuss overseas tax or non-resident trusts issues, issues, contact the Trusts helpline.

What Income Tax you should pay

The tax rules for non-resident trusts are very complicated. Although there are general rules,rules that apply to all non-resident trusts, each trust getsis a different treatmentand is treated separately depending on:

• if it’s a bare trust, discretionary trust or an interest in possession trust
• if the settlor has an interest in the trust
• the residence status of the settlors or beneficiaries

If you are a trustee of a non-resident trust, you only pay UK tax on UK income you receive.

How much you need to pay as a trustee

For most discretionary or accumulation trusts, trustees pay tax at:

• 39.35% on dividend income from stocks and shares
• 45% on UK interest (including ‘free of tax to residents abroad’ securities) if a beneficiary, or someone who might become one, is resident in the UK
• 45% on all other non-dividend income arising in the UK

For interest in possession trusts, trustees pay tax at the:

• dividend ordinary rate (8.75%) on trust dividend income
• basic rate (20%) on all other types of income

Find information on the the tax free amount for trusts.

How to declare any UK source income

You should use form form SA900 Trust and Estate Tax Return to to declare any UK source income due from the trust.

YouWhen appropriate, you may also need to complete form form SA906 — the Trust and Estate Non-Residence supplementary pages.

FindFor out more about information read Income Tax and Capital Gains Tax for non-resident trusts (PDF, 370Income KB, 21Tax pages).and Capital Gains Tax for non-resident trusts.

How much you should pay if you are a settlor

You need to pay tax on your trust’s income as if it’s your own income if either:

• you are the settlor (the person who puts assets into a trust)
• you, your spouse or civil partner can benefit from the income or capital of a non-resident trust

You will get a tax credit for the UK tax paid by the trustees on the same income.

The income of the trust is not treated as yours if you (or your spouse or civil partner) cannot benefit from it. However, you’ll also have to pay Income Tax if the:

• beneficiaries include your children
• trust makes any payments to children of of yours who are unmarried and under the age of 18

You can claim relief for tax on income paid to your unmarried children, aged under 18, if the trustees are non-resident. This relief is given under Extra Statutory Concession (ESC) A93.

Read page 12 of of Income Tax and Capital Gains Tax for non-resident trusts (PDF, 370 (PDF, KB, 21370 pages) forKB, 21 pages) for more guidance.

How much you should pay if you are a beneficiary

If you’re a UK resident beneficiary of a non-resident trust, you may need to complete a Self Assessment tax return and the the SA107 supplementary pages. The guidance notes for these pages tell you how to complete them.

If you’re a UK resident and get income from a non-resident discretionary trust, you can get tax relief if the trustees have already paid tax on the income. This relief is given under ESC B18.

Read page 11 of Income Tax and Capital Gains Tax for non-resident trusts (PDF, 370 KB, 21 pages) for more guidance.

If you’re a non-resident beneficiary of a non-resident income in possession trust, you only need include income from a UK source on your tax return.

Read pageFor 11more ofinformation read Income Tax and Capital Gains Tax for non-resident trusts (PDF, 370 KB, 21 pages) for more guidance..

What Capital Gains Tax you should pay

Capital Gains Tax is a tax on the gain in the value of assets such as shares, land or buildings. A trust may need to pay the tax if assets have gone up in value since being put into the trust and are:

• sold
• given away
• exchanged (disposed of)

Find out out if your trust may need to pay Capital Gains Tax.

Trustees of non-resident trusts do not usually pay UK Capital Gains Tax. Instead, the settlor or the beneficiaries may have to pay tax on gains made by the non-resident trustees.

If you’re a trustee of a non-resident trust and dispose of UK property or land, you may be liable to pay Capital Gains Tax. You can find out more about about Capital Gains Tax for UK property or land if you’re non-resident.

The tax rate for non-resident trustees is the same as for resident trustees, and the annual exempt amount is also available.

When

You youmust need to report disposalthe of UK property

Report disposal of a UK property or land to usHMRC within 60 days of the completion date, using a a Capital Gains Tax on UK property account.

Register with us

Trustees of non-resident trusts,trusts that become liable to pay non-resident Capital Gains Tax, must registerbe registered with usHMRC before either:

• creating a Capital Gains Tax on UK property account
• completingaccount. aFind Capitalout Gainsmore Taxabout onwhen UKand propertyhow formto register a trust.

  If toyou’re reporta thetrustee disposalof bya post

Findpay, outyou moremust about whenuse anda howCapital toGains registerTax aon trustUK property form. to report the disposal by post.

Read the HS299 Self Assessment helpsheet to workto outhelp ifyou decide whether you have taxable capital gains as settlor of a non-resident trust.

What Inheritance Tax you should pay

Trustees of trusts, including of non-resident trusts, may have to pay Inheritance Tax on assets in the trust.

For the years up to 5 April 2025, trustees of non-resident trusts will only have to pay it:

• it on assets situated outside the UK
• UK, if the settlor was domiciled (or deemed domiciled) in the UK when the assets were put into the trust

trust.

From 6 April 2025, if the settlor is a long-term UK resident, non-UK assets will be subject to Inheritance Tax.

Find more information about these rules in in Inheritance Tax if you’re a long-term UK resident.

When Inheritance Tax may be due

Depending on the value of the assets in the trust, Inheritance Tax may be due when:

• assets are put into the trust
• the trust reaches a ten-year anniversary
• assets are taken out of the trust or the trust ceases

It does not matter if the trustees or beneficiaries are resident in the UK or not.

Read TrustsRead trusts and Inheritance Tax for for more information.

More information

Contact the Trusts helpline for for more help. YouIt’s shouldbest to get professional advice from a tax agent or accountant about non-resident trusts.