Commentary

I5.1151 Property going into settlements

IHT, trusts and estates

I5.1151 Property going into settlements

Capital gains tax (CGT) liability of settlor

I5.1151 Property going into settlements

Generally speaking, there will be a disposal of assets for capital gains tax (CGT) purposes on the creation of a settlement, unless the assets settled are cash (see I3.611). Thus, there will probably be a CGT charge. This will be the case even though the settlor retains the right (or someone else has the power) to revoke the settlement, retains an interest in the settled property as a beneficiary or is a trustee or sole trustee of the settlement1.

The assets transferred into the settlement will be

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