At present, further commentary is needed from HMRC but our current view on the last three points above is:

• The use of the word “accrued” in the second statement suggests that a valuation of the assets of each offshore trust as at 5 April 2008 may well be needed so as to ascertain, in relation to sales after that date, what gains had accrued prior to 5 April 2008 in order to correctly report any future gains being distributed from the trust. Since this 'clarification', the suggestion is that this is not what was meant and we should not presume exclusion of these accruals.
  
• This is not how the current legislation is drafted but is a welcome concession.
   
• This could have huge implications for individuals wishing to dispose of works of art via UK auction houses. If the work of art is brought in to the UK for sale and the funds are still left offshore, the seller may need to recognise a remittance as the equivalent to the fair market value of the works of art.

Plainly, it is unsatisfactory that the rule changes remain in such a state of flux and there are many conflicting steers.

Please get in touch with your usual contact at Frank Hirth to discuss any of the above proposals or concerns you may have.

Following the publishing of the draft legislation, it was widely seen by professionals as considerably more far reaching in nature than had initially been expected. During the consultation period, HM Revenue & Customs (HMRC) have received responses (including from this firm) on the difficulties with their proposals particularly in the trust area. HMRC Chairman, Mr Dave Hartnett, sent an open letter on the proposals as the consultation period drew to an end.

Mr Hartnett addressed four issues that have been raised and that he “Éwants to make clear what the Government's intention has always been and how it will be set out in the legislation to be brought forward”.

The four issues that Mr Hartnett wished to clarify are as follows:

• Individuals using the remittance basis will not be required to make any additional disclosures as to the source of the income and/or gains they have subsequently remitted and paid tax on in the UK.
   
• There will be no retrospection in the treatment of trusts and the tax changes will not apply to gains accrued or realised prior to the changes coming in to effect (see below).
   
• Money brought into the UK to pay the £30,000 charge will not itself be taxable.
   
• It will continue to be possible to bring works of art into the UK for public display without incurring a charge to tax.