Against domicile as a connecting factor to tax overseas trusts and global wealth

Abstract

Abstract An enduring dilemma is how to tax overseas trusts consistently with the Revenue’s competing goals of raising revenue, whilst also attracting wealthy individuals to invest in the UK. This article suggests that the current approach to taxing overseas trusts achieves neither goal. The main issue, it is contended, lies in the connecting factors utilised to charge overseas trusts. This article argues that (i) domicile should be abandoned as a connecting factor to tax trusts and (ii) greater emphasis should be placed on the settlor and beneficiary’s long-term residence.