It matters a great deal. Each child's country will tax what they receive from the structure under its own rules, and banks will report each child to their own country. A structure that suits one child can cause problems for another, so it has to work for every country involved.
Each country taxes distributions its own way
One country may tax a payment from a trust or foundation as income. Another may treat it as a gift or a capital receipt. Some tax beneficiaries on income the structure earns, even before anything is paid out. Others tax only what is received. The same payment can produce very different results for two siblings. A child who lives in a country with no personal income tax may have nothing to pay, while a sibling elsewhere faces a charge and a filing duty.
CRS reports each beneficiary to their own country
Under the Common Reporting Standard, a trust's beneficiaries are reportable persons. A beneficiary who may receive a discretionary payment can count, as well as one with a fixed right. Each person's details, including their country of residence and tax number, are reported. That information is then exchanged with the country where each child lives. See What is reported about a trust or foundation under CRS?
What to check
- How each child's country taxes payments from the structure.
- Whether any country taxes income before it is paid out.
- What each child must declare on their own tax return.
- What changes if a child moves again.
An example
Vikram, an Indian businessman in Dubai, has a family structure that benefits his three children. One lives in Singapore, one in Germany and one in Dubai. A review shows that the same annual payment is treated differently in each country. It also checks whether any of the three countries taxes a child before anything is paid out. Vikram uses the review to plan payments and records so each child can file correctly.
Quick questions
Does my children's residence affect my own tax?
It can affect how the structure is reported and taxed overall, so all family members' countries should be checked together.
What if a child moves country later?
Their new country's rules apply from the move, and CRS reports will go there once the bank is told.
Sources: UAE Ministry of Finance: Guidance Notes for the Common Reporting Standard; UAE Ministry of Finance: CRS frequently asked questions.
General information as at October 2026, not advice. The examples are fictional and simplified, and the rules have conditions and exceptions not covered here. Take advice on your own circumstances, in each country involved, before acting.