Trust gains - urgent action may be required
We understand that there is a strong possibility that the Chancellor is set to announce in the Autumn Statement on 23rd November that with effect from that date it will no longer be possible for trustees of offshore trusts to "wash out" stockpiled gains by making capital payments to non-UK resident beneficiaries.
Section 87 TCGA 1992 provides for gains made by the trustees of an offshore trust to be pooled and matched to capital payments to the beneficiaries of the trust. All other things being equal, offshore trust gains fall outside the charge to CGT if they are matched to payments to non-UK resident beneficiaries (thereby reducing or eliminating the gains attributable to UK resident beneficiaries).
This is particularly bad timing given that a large number of offshore structures are currently in the process of de-enveloping UK properties and, in many cases, relying on the washing out provisions in order to avoid a CGT charge on UK resident beneficiaries who have been in occupation of those properties. For those in the middle of this process it would appear to be sensible to make sure that the capital payment is made to the non-resident beneficiary before 23rd November.
I should stress that this is only a rumour, albeit one coming from a good source. The usual health warnings apply.