Trust Framework & Asset Protection

Executive Summary

International family offices and ultra-high-net-worth investors rely on trust framework structures to manage long-term wealth transition, estate planning, philanthropic endowments, and multi-generational governance. Unintended or abrupt changes to trust taxation risk triggering capital flight and the immediate restructuring of global asset protection portfolios away from the UK legal system.

FIFB’s Trust Framework & Asset Protection policy advocates for clear, predictable legal mechanisms that protect historical trust framework arrangements, maintain the integrity of English private law, and secure ongoing capital commitments within the UK.

Core Legislative & Policy Recommendations

• Statutory Grandfathering for Existing Trusts: Foreign trusts established prior to major legislative reforms (including pre-October 2024 structures) should maintain their excluded property status regarding non-UK assets for Inheritance Tax (IHT) purposes. Guaranteeing grandfathered protection ensures that international families who committed capital under established rules are not retroactively penalized.
• Clear Distinction Between UK and Non-UK Assets: UK real estate, UK-registered corporate shares, and domestic commercial operations should remain fully subject to standard UK tax laws. Conversely, foreign assets held within valid international trusts settled by non-UK individuals prior to UK tax residency should remain shielded from UK Inheritance Tax and offshore income attribution rules.
• Modernized Governance & Reporting Protocols: In exchange for statutory certainty, FIFB supports standardized beneficial ownership reporting and compliance frameworks aligned with OECD and FATF standards. Clear statutory definitions reduce litigation risks, giving UK trust companies, private banks, legal counsel, and wealth managers the legal clarity needed to administer global estates safely.
• Multi-Generational Economic Retainage: Protecting valid trust structures anchors international families to the UK for generations. When family trusts are securely administered in the UK, underlying capital flows continuously into direct investments in UK enterprises, venture capital funds, commercial developments, and multi-decade endowments to UK universities, medical research centers, and cultural institutions.

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