Commentary

I5.1015 Trustees' CGT—basic provisions

IHT, trusts and estates

I5.1015 Trustees' CGT—basic provisions

Taxation of trustees—CGT

I5.1015 Trustees' CGT—basic provisions

Taxing gains on trustees—introduction

There may be CGT implications for trustees when:

  1.  

    •     a trust is created

  2.  

    •     gains accrue to the trustees while a settlement is in existence, and

  3.  

    •     certain events take place which are deemed to be disposals of trust assets, such as when a beneficiary becomes absolutely entitled to the trust property

Chargeable gains realised by trustees are chargeable to CGT in the name of any one or more of the relevant trustees, ie a trustee in the tax year concerned or any subsequent trustee1.

Gains are not chargeable on the trustees when:

  1.  

    •     they are bare trustees2

  2.  

    •     they are trustees of an 'employee trust' and a beneficiary receives, or becomes entitled to, trust property

  3.  

    •     the gain of a non-resident or dual resident trust is attributed to someone else, eg the settlor3, a beneficiary4 or someone else5 (see I5.1225–I5.1231 and I5.1240–I5.1245)

If the trustees realise an allowable capital loss on the disposal of trust property, they can transfer that loss to a beneficiary, to the extent that

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