Singapore VCC insights

UK Budget 2026 Trusts: What Changes for a Family Trust Run From Singapore

By VCC Editorial Team · Published 5 November 2026

Short answer: Budget 2026 contains two trust measures that matter to a family trust administered in Singapore. One restricts when trustees’ liabilities reduce inheritance tax on trust property. The other relieves the capital gains tax exit charge when a trustee moves to the UK only briefly. Both run from 28 October 2026, subject to Finance Bill 2026-27.

The question on uk budget 2026 trusts for a Singapore-based family is narrow: which measures announced on 28 October 2026 reach a trust whose trustee sits in Singapore but whose settlor, beneficiaries or assets still touch the United Kingdom. This note relies on the Budget 2026 document, the HM Revenue and Customs (HMRC) tax information and impact notes and the Overview of Tax Legislation and Rates (OOTLAR), all opened on 5 November 2026. Every measure remains a proposal until Finance Bill 2026-27 is enacted, and effective dates are given only where the official documents state them.

This article is general information only and is not legal, tax or immigration advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

Which UK Budget 2026 trusts measures reach a trust administered in Singapore?

Two measures target trusts directly and a third reaches them through offshore companies. A Singapore trustee is affected only where UK inheritance tax or capital gains tax already reaches the trust.

The Budget 2026 document lists the IHT liabilities measure, the CGT exit charge easement for trusts affected by trustee migration, and a technical change so that the attribution of non-resident close company gains to UK resident individuals, trusts and companies also covers protected cell companies. All three are to be legislated in Finance Bill 2026-27.

Measure	What the official documents say	Effective date stated	Who in a Singapore structure should look at it
IHT: liabilities relating to settled property	Statutory rule for trustees’ liabilities; anti-avoidance extended where value comes from a beneficiary’s own estate	On or after 28 October 2026	Trustees of trusts with relevant property or interest in possession exposure that carry loans or other liabilities
CGT: temporarily migrated trusts	No exit charge where a trustee’s move makes the trust UK resident only briefly	Exit charges on or after 28 October 2026	Trusts with individual trustees, or family members on the board, who may relocate to the UK
Capital gains: protected cell companies	Participator rules for non-resident close companies to apply to protected cell companies	From 28 October 2026	Trusts with UK resident beneficiaries holding cell company structures
Residence-based regime	Government will continue to assess whether it strikes the right balance	None; no measure announced	Settlors and principals still within the long-term residence tail

What does the inheritance tax change on trust liabilities do?

It puts the deduction of trustees’ liabilities on a statutory footing and stops liabilities funded from a beneficiary’s own estate reducing IHT. For a well-run trust with ordinary borrowing, the HMRC note suggests the practical effect is greater certainty rather than a new charge.

The HMRC note on the measure explains that current legislation “does not specifically provide for trustees’ liabilities to reduce the value of trust assets”. Trustee liabilities may be reflected under the general valuation rules because trustees can recover them from the fund through their right of indemnity, the trustee’s lien. Personal liabilities, by contrast, are governed by ss 5(3) and 5(5) and Part 6 of the Inheritance Tax Act 1984. The restrictions in ss 162A to 162C and 175A, and in s 103 of the Finance Act 1986, prevent certain debts from reducing an estate.

The proposal has three parts:

• Liabilities “properly incurred by trustees when acting on behalf of a settlement” are generally taken into account when valuing settled property, subject to the existing restrictions.
• Where a person is treated under s 49 as beneficially entitled to settled property (an interest in possession), equivalent debt deduction restrictions will apply to trustees’ liabilities. Liabilities connected with value originating from that beneficiary’s own estate cannot then reduce IHT.
• Supplementary anti-avoidance provisions, and a time-limited power to make consequential amendments after implementation.

HMRC estimates a nil Exchequer impact and expects the measure to affect “a small number of individuals”. Draft legislation and an explanatory note were published with the policy paper on 28 October 2026; draft clauses can change before enactment.

For a Singapore trustee the first question is whether the trust is within UK IHT at all. A trust holding only non-UK assets, whose settlor is outside the long-term residence rules, will often have no UK IHT occasion for the rule to apply to. A trust holding UK assets, or one whose settlor is still within the long-term residence tail, may well have one. Trustees who funded UK assets by loan, or borrowed against trust assets for a beneficiary, should review that borrowing now, because the stated date has already passed.

How does the capital gains tax exit charge easement work for trustee migration?

It removes the CGT exit charge where a trust becomes UK resident only because a trustee moved to the UK, and stops being UK resident again later that year or in the following year. The HMRC note states it will have effect “in relation to exit charges on or after 28 October 2026”.

Under current law, the residence of a body of trustees for CGT is decided by s 69 of the Taxation of Chargeable Gains Act 1992 and, for income tax, by s 475 of the Income Tax Act 2007. When the trustees cease to be UK resident, s 80 of that Act imposes a charge on a deemed disposal of the trust assets, and paragraph 5 of Schedule 5A sets notification requirements. An individual trustee’s own residence follows the statutory residence test in Schedule 45 to the Finance Act 2013. A trust can therefore become UK resident by accident when a family member who is a trustee moves to London, then suffer an exit charge when its residence moves back.

The HMRC note, “Capital Gains Tax exit charges: temporarily migrated trusts”, says the measure “will insert a new section” into the 1992 Act. Its stated objective is to help trustees move to the UK sooner. HMRC expects that “only a very small number of offshore trusts” will have trustees whose move to the UK affects the trust’s residence, and estimates a negligible Exchequer impact.

This is a relief for a short UK stay, not a licence to bring a trust onshore. A Singapore licensed trust company or private trust company (PTC) acting as sole trustee does not move, so the point arises mainly where individual co-trustees relocate. Our guide to the private trust company exemption in Singapore covers board composition for a PTC.

What did the Budget say about people moving to the UK with existing trusts?

The Budget document frames the exit charge change as part of a wider aim: the government is taking action “to make it easier for people with existing trusts to move to the UK”. The only trust measure the official documents attach to that aim is the exit charge easement.

The same passage says the government “will continue to assess whether the residence-based regime is striking the right balance”, supported by evidence next year. That is a statement of review, not a proposal. We found no change to the long-term residence test or the IHT tail in the Budget document or the OOTLAR, so families should plan on the rules as they stand.

What has not changed for long-term UK residents and their trusts?

The residence-based IHT rules in force since 6 April 2025 remain the frame. Budget 2026 did not alter them.

HMRC’s guidance, “Inheritance Tax if you’re a long-term UK resident”, states that a person is long-term UK resident if UK tax resident for the previous 10 consecutive years, or for 10 or more of the previous 20. Long-term residence can continue “for up to 10 tax years after you leave the UK”, shorter for those with fewer years of residence: 3 years for 10 to 13 years of residence, 4 for 14 and 5 for 15. The same guidance states that IHT will be charged on overseas assets in a trust the person has set up or added to. On death, however, there is no IHT on trust assets that were placed in the trust while the settlor was non-UK domiciled, were overseas on 30 October 2024 and were overseas at death or when the settlor’s rights ended. It also asks individuals to tell trustees when their long-term residence status changes, “as there may be separate trusts charges to pay.”

That instruction is where a Singapore trustee’s monitoring begins. The departing principal’s exit timeline and the trust charges during the tail are covered in our guide for a UK non-dom moving to Singapore.

What does Singapore leave unchanged for the trust?

Nothing in the UK Budget changes the Singapore position: there is no estate duty, and trust income is taxed under the Income Tax Act 1947.

IRAS states that estate duty “has been removed for deaths on and after 15 February 2008”, so there is no Singapore charge on a settlor’s death to set against UK IHT. Where the trust relies on the foreign trust exemption, s 13F(6) of the Income Tax Act 1947 provides that the section does not apply to a trust constituted, or a company incorporated, on or after 1 January 2028 (Act 35 of 2024, in force 27 November 2024). Families considering a new trust for UK planning reasons should factor that date into the timetable. The Singapore rules for trustee, beneficiary and settlor taxation are covered in our guide to the taxation of trusts in Singapore.

Families weighing a company rather than a trust should read today’s comparison of a family investment company in Singapore and a UK FIC.

What should a Singapore trustee review before Finance Bill 2026-27?

Map UK exposure first, then test borrowing and trustee residence against the two measures. Both stated dates have passed, so the review is about transactions and events from 28 October 2026 onwards.

1. Classify each trust for UK purposes: settlor’s long-term residence status and expected end date, UK-situated assets, UK resident beneficiaries and any interest in possession treated as within s 49.
2. List every liability the trustees carry, the asset it funded, the source of the funds and whether any value originated from a beneficiary’s own estate.
3. Diarise every IHT occasion after 28 October 2026: ten-year anniversaries, exits, additions, and the death of a life tenant or settlor.
4. Record the residence of every individual trustee and flag anyone planning to move to the UK, with the expected length of stay.
5. Check cell company and non-resident close company holdings where any UK resident person is a participator.
6. Obtain UK tax advice from a UK-qualified adviser on any item flagged. Re-test against the Finance Bill clauses when published and again on Royal Assent.
7. Keep the Singapore file aligned with the UK analysis, including the trust’s IRAS filings and, for a foreign trust, the s 13F position before 1 January 2028.

Where the review leads to a change of trustee, the handover itself needs care. See our sister site’s note on reconciling fund ownership and bank instructions when a family trust changes trustee.

Frequently asked questions

Are the Budget 2026 trust measures already law?

No. They are proposals for Finance Bill 2026-27, with stated effect from 28 October 2026 once enacted. The final text may differ from the draft.

Does the inheritance tax liabilities change affect a trust with only non-UK assets?

Only where UK IHT can apply to the trust property, for example because the settlor is long-term UK resident or the trust holds UK assets. Where no IHT occasion arises, the valuation rule has nothing to apply to.

Can a Singapore trust now move to the UK without an exit charge?

Not generally. The easement covers a trust that becomes UK resident because a trustee moves to the UK, and ceases to be UK resident later that year or the following year. A longer UK residence is outside the published description.

Did Budget 2026 change the long-term residence rules or the IHT tail?

No. The Budget document says the government will continue to assess the residence-based regime, supported by evidence next year. No measure was announced.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email hello@rafflescorporateservices.com. Raffles Corporate Services works with a panel of corporate and employment law firms; this article is general information, not legal advice.

Last reviewed: 5 November 2026. The Editorial Team, Variable Capital Companies Act.