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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Effects of residence/domicile: residence etc: settlements

The trustees of a settlement are within the charge to Capital Gains Tax if they are resident and ordinarily resident* in the UK at any time, see CG10980, in a year of assessment.

For years up to and including 2006-07 trustees are treated as being resident and ordinarily resident in the UK unless:

  • the general administration of the trust is ordinarily carried on outside the UK and
  • a majority of the trustees are at the time not resident or not ordinarily resident in the UK: TCGA92/S69(1) before its amendment by FA 2006.

See the guidance in CG33370+.

For the year 2007-08 onwards the residence status of trustees for CGT purposes is decided according to the same rules that apply to income tax. See CG33405 and the guidance at TSEM1461.

If a settlement has a body of trustees that is treated as not resident and not ordinarily resident* in the UK but, exceptionally, the trustees carry on a trade in the UK through a branch or agency, the settlement would be within the charge to Capital Gains Tax in respect of gains and losses on assets relating to that activity (TCGA92/S10). For further details see CG13550.

A Statutory Residence Test for individuals was introduced for years from 6/4/2013. * In addition for 2013/14 and later years, ordinary residence no longer needs to be considered. Guidance on the Statutory Residence Test can be found in the RDR3 Guidance Note: Statutory Residence Test (SRT).