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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Annual exempt amount: trust exemption: general

TCGA92/SCH1/PARA2 (2)

The annual exempt amount for trustees is basically one-half of that for individuals. Ifhowever the settlor has made more than one settlement it may be restricted, see CG18096.Settlements for the disabled are considered at CG18050+.

The purpose of the restriction was to deter settlors from dividing up settlements orcreating multiple settlements in order to obtain more than one exemption. It applies onlyto settlements made after 6 June 1978.

Difficulties may arise in deciding when a settlement was `made’. You should construe theword `made’ as referring to the various means by which a separate settlement may come intoexistence. This includes straightforward new deeds of settlement, assignments,appointments and transfers to new settlements, but NOT additions to the settled propertyof an existing settlement. Where it is argued in a particular case that two or moresettlements exist because of the exercise of a deed of appointment or power ofadvancement, the matter should be determined by reference to the guidelines in CG37800+.

A settlement under a will or intestacy should be regarded as made on the date of death.