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Which EU Member State court has jurisdiction?—checklist

Which EU Member State court has jurisdiction?—checklist This Checklist is for use when determining which EU Member State’s courts have jurisdiction to determine a dispute. It does this by considering the articles in Regulation (EU) 1215/2012, Brussels I (recast) that are applied to determine which court has jurisdiction to determine the dispute. The general rule is that a defendant should be sued in the courts of the EU Member State in which they are domiciled. However, a number of articles derogate from this rule. Some derogations are mandatory, while and others apply if the claimant seeks to rely on that provision. The articles are applied in the hierarchy set out in the table below. If the first article listed is not applicable, the next article should be considered to see if that is applicable and so on. Determining jurisdiction Type of jurisdiction Consideration Mandatory/by choice Brussels I (recast) Exclusive jurisdiction Certain prescribed circumstances provide for the courts of an EU Member State to have jurisdiction regardless of...

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Excluded property from 6 April 2017—flowcharts

Excluded property from 6 April 2017—flowcharts These flowcharts are designed to help determine if an asset is excluded property for the purposes of UK inheritance tax (IHT) on or after 6 April 2017. The flowcharts consider whether an asset is excluded property or not, depending on the situs of the property and the domicile of the beneficial owner or settlor as appropriate. However, the detailed provisions relating to excluded property should be referred to and practitioners should also consider whether a double tax treaty may apply to override the excluded property regime depending on the particular circumstances of a matter. See Practice Note: Double taxation relief—summary. Conversely, unilateral relief from IHT may apply where a tax of a similar nature has already been levied in respect of the same asset by a foreign tax authority. For further information, see Practice Notes: Excluded property trusts—key events affecting IHT status and Situs of assets for succession and IHT. Situs of property The situs of an asset is important for determining the...

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Funding an employee benefit trust

Funding an employee benefit trust This Practice Note covers the following issues in relation to the funding of an employee benefit trust (EBT): • practical aspects of funding an EBT • financial assistance—the background • financial assistance—the current position • relevance of financial assistance to EBTs • financial assistance—exemptions • the employees’ shares scheme exemption • consequences of non-compliance of the financial assistance provisions • tax implications for close companies which fund EBTs, and • corporation tax relief in respect of EBT funding Practical aspects of funding an EBT When an EBT is first set up, it needs to be provided with initial financing, as a trust cannot exist without initial trust assets. It is common for a nominal amount, for example £100, to be settled on the trustee in order to establish the EBT (for further details, see Practice Note: Setting up an EBT). However, after the EBT has established, other funding can be provided. This may be by way of: • voluntary contribution • loan...

Deemed domicile for tax from 6 April 2017 to 5 April 2025

Deemed domicile for tax from 6 April 2017 to 5 April 2025 STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime Finance Act 2025 (FA 2025) which received Royal Assent on 20 March 2025, implements legislation to abolish the remittance basis of taxation and replace it with a residence-based regime, commencing on 6 April 2025. FA 2025 also replaces domicile as the key factor in establishing liability to inheritance tax. Other changes include amendment of the rules determining excluded property status, the abolition of protected settlements status of offshore trusts, and changes to overseas workday relief. For information on these changes, see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. At Summer Budget 2015, the government announced wide-ranging reforms to the deemed domicile rules and also to the excluded property rules...

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Privacy notice for trustees—UK GDPR compliant

Privacy notice for trustees—UK GDPR compliant We take your privacy very seriously. Please read this privacy notice carefully as it contains important information on who we are and how and why we collect, store, use and share your personal data. It also explains your rights in relation to your personal data and how to contact us or supervisory authorities in the event you have a complaint. We collect, use and are responsible for certain personal data about you. When we do so we are subject to the UK General Data Protection Regulation (UK GDPR). [We are also subject to the EU General Data Protection Regulation (EU GDPR) in relation to individuals [and our wider operations ]in the European Economic Area (EEA)]. Key terms It would be helpful to start by explaining some key terms used in this notice: We, us, our [Insert full legal name of all the trustees or, if the trustees are a professional firm, insert the firm’s name (if acting...

Trust for a disabled person—discretionary

Trust for a disabled person—discretionary This TRUST is made on [date] Parties 1 [settlor] of [address] (the Settlor) and 2 [original trustees] of [addresses] (the Original Trustees) Background (A) The settlor wishes to make this Trust and has transferred to the Original Trustees the assets described in Schedule 1 to be held on the following trusts. (B) The Principal Beneficiary is a disabled person within the meaning of that term in the Finance Act 2005, Schedule 1A. This Deed PROVIDES: 1 Definitions and interpretation In this Trust: 1.1 Discretionary Beneficiaries • means (a) any spouse or [widower OR widow] whether or not remarried of the Principal Beneficiary; (b) the descendants of the Principal Beneficiary; (c) the spouses, widows or widowers (whether or not remarried) of the descendants of the Principal Beneficiary; 1.2 Principal Beneficiary • means [disabled person]; 1.3 spouse • shall include a civil partner registered under the Civil Partnership Act 2004 and a spouse of the same sex, and a person is a...

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What test applies for determining whether someone is 'incapable of administering their property or managing their affairs' for the purposes of establishing whether a beneficiary suffering from a mental disorder would qualify as disabled for tax purposes?

What test applies for determining whether someone is 'incapable of administering their property or managing their affairs' for the purposes of establishing whether a beneficiary suffering from a mental disorder would qualify as disabled for tax purposes? This answer is limited to the definition of a disabled beneficiary for inheritance tax (IHT) and does not consider the definition or implications for taxation in relation to income tax or capital gains tax. It is also assumed that the question relates to the settlement into trust of funds for the disabled person. Following the changes brought about by the Finance Act 2006, most settlements created by a settlor during their lifetime are relevant property trusts for the purposes of IHT and certain trusts created by Will also fall into the relevant property regime. Therefore, for the most part, lifetime gifts into settlements are immediately chargeable transfers on which the settlor will be charged to IHT at the lifetime rate of 20% where the amount settled exceeds the settlor's...

If the life tenant and remainder beneficiaries of a trust jointly resettle the trust fund, who would be treated as the ‘settlor’ for the purposes of the income tax settlements legislation? Could the original remainder beneficiaries be potential beneficiaries under the new trusts without the settlements legislation applying?

If the life tenant and remainder beneficiaries of a trust jointly resettle the trust fund, who would be treated as the ‘settlor’ for the purposes of the income tax settlements legislation? Could the original remainder beneficiaries be potential beneficiaries under the new trusts without the settlements legislation applying? For the purposes of the income tax settlements legislation in England and Wales, a ‘settlor’ is defined broadly. According to section 620 of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), a settlor is any person by whom the settlement was made. This includes individuals who have provided funds directly or indirectly for the purpose of the settlement, undertaken to provide such funds, or entered into reciprocal arrangements with another person to make or enter into the settlement. Furthermore, HMRC guidance indicates that the settlements legislation can apply even if the settlor or their spouse or civil partner does not receive any benefit from the settlement income, as long as there is a possibility that they may benefit. The...

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FTT decides that deemed income of settlor of offshore trusts was outside the protected settlements regime (Louwman v HMRC)

Tax analysis: In Louwman v HMRC (7 March 2025), the First-tier Tax Tribunal (FTT) decided that offshore income gains and accrued income profits, of offshore settlements settled by the taxpayer before she became deemed UK domiciled, were not ‘protected foreign-source income’ under the protected settlements regime. Accordingly, the taxpayer was liable to income tax on an arising basis under the transfers of assets abroad rules.

Autumn Budget 2024—reforming the taxation of non-doms

Private Client analysis: At Autumn Budget 2024, it was confirmed that the remittance basis of taxation will be abolished and a residence-based regime for inheritance tax (IHT) will be introduced from 6 April 2025. Alison Cartin, Senior Counsel–Knowledge, Taylor Wessing LLP considers these reforms to the taxation of UK resident non-UK domiciled individuals (non-doms) and the practical points.