CG38020 - Disposal of interests in settlements: computation of gain

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TCGA92/S76 (2)

Where a beneficiary becomes absolutely entitled to property as against the trustee, he she or it is treated as disposing of their interest in consideration of obtaining that property.

Where the disposal of a life interest gives rise to a chargeable gain, that interest should be regarded as a wasting asset, see CG76700, if the predictable life of the person by reference to whose life the duration of the interest is measured is 50 years or less at the date of acquisition.

An estimate of `predictable life’ at the date of the acquisition by the disponor may be obtained from Revenue Policy Business Tax (Life Assurance). The request should be accompanied by a copy of the instrument creating the life interest in order that it may be seen

• whether the life interest is sole or joint
• whether the life interest is in possession or dependent on the death of a previous life tenant, and
• whether the life tenant is male or female.

See CG68960+ as regards the valuation of an interest in settled property.