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A conforming interpretation of the UK exit charges legislation existed

By Arthur Weller, December 2024

The Upper Tribunal held that a conforming interpretation of EU law existed for the imposition of an exit tax charge under domestic law. 

In 1992, a Cyprus domiciled individual (P) established four settlements for his children and other family members. He transferred into the trusts some shares in a company (CE). P and a UK trust company were the original trustees. P’s wife (Mrs P) was later added as a trustee. Early in 2004, P and his wife decided to return to live in Cyprus. On 19 August 2004, they resigned as trustees and were replaced by three Cyprus resident individuals. The UK resident trust company remained as a trustee, but the effect was that three out of the four trustees were then non-UK resident. The following month, Mrs P moved back to Cyprus. P moved there in early 2005. On 19 December 2005, the trustees sold the shares in CE (i.e., after the migration of the trusts but before the due date for payment of any capital gains tax (CGT)

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