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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Death: non-trust life interests: other interests

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

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

If the correct analogy is that the particular arrangement has the characteristics ofsettled property then it is treated as such. So a case involving Hindu Undivided Propertywould 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 isbroadly similar to a Scottish proper liferent.