A couple of key things for offshore trustees with UK connections to be looking out for when Rishi Sunak announces his Budget tomorrow:

1. An increase in Capital Gains Tax (CGT) - this is very relevant for trusts with UK resident beneficiaries, who can be subject to CGT on some distributions. Whilst the headline CGT rate is 20%, a surcharge can sometimes apply on trust distributions involving 'stockpiled' gains to bring the tax rate on the distribution up to an effective 32%. A small increase in CGT (i.e. to 25%) could take the effective rate on stockpiled gains to 40%, and a larger increase (to say 40%) could take the effective rate to 64%. Accelerations of distributions will be worth considering before any such CGT increase becomes effective (assuming that it does not happen overnight!).

2. An increase in corporation tax - this would impact those offshore companies which own UK real estate and which now find themselves subject to corporation tax. The rate is currently 19% and expected to inch up over the next few years.