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HMRC internal manual

Capital Gains Manual

Death and Personal Representatives: Non-trust life interests: Death: non-trust life interests: other interests

The law of many other countries provide for various kinds of interest which are unknown to the law of England and Wales. One must therefore follow the principles laid down in Memec PLC v. CIR 71TC77, and R v CIR, ex parte Bishopp, 72TC322, in particular the remarks at 71TC112:

“What, in my judgment, we have to do in the present case is to consider the characteristics of an English or Scottish partnership which make it transparent and then to see to what extent those characteristics are shared or not by the silent partnership in order to determine whether the silent partnership should be treated for corporation tax purposes in the same way.”

If the correct analogy is that the particular arrangement has the characteristics of settled property then it is treated as such. So a case involving Hindu Undivided Property would be regarded as a discretionary trust rather than an unincorporated association.

A usufruct governed by French law would be regarded as a non-trust arrangement as it is broadly similar to a Scottish proper liferent.