TRUSTS
Trust Planning

The US Tax system imposes complex rules on those who set up or are beneficiaries of trusts. These rules are particularly severe when the trust is a non-US trust. On top of this, the US system imposes complex reporting rules when foreign trusts are involved as well and will penalise anyone who fails to comply with reporting rules.

There can also be substantial differences in the way the US system taxes beneficiaries of foreign trust when compared to either the UK or other foreign jurisdiction. Without proper planning the distributions from foreign trust can bear a substantial tax (up to 100% of the distribution) and because the US system is so complex, beneficiaries can be subject to current US income taxation on income and gains earned by the foreign trust. Even if the US beneficiary does not receive a distribution from the trust. Finally, all foreign trust income and gains must be converted from the foreign accounts into accounts that comply with the US rules. Clearly, this is hugely complicated and not a process to be entered into in ignorance of the full facts.

We have the expertise to work with you and your UK advisors in developing positions that allow the effective use of trusts, especially foreign ones, while integrating the effect of both the US and UK tax systems.

The effective design and use of trusts.

Accounting for trust income and gains as required for US tax reporting purposes.

Integration of the US planning with that of the non-US jurisdictions involved with the trust planning.

Assistance in meeting all compliance obligations of US individuals who set up foreign trust, or are beneficiaries of foreign trusts.