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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Trusts: outline of CGT for trusts: rates of tax

The rates of Capital Gains Tax that apply to the trustees of UK resident settlements are set out below.

For the years up to and including 2007-08 the trustees’ gains were charged on the settlor if the settlor or the settlor’s spouse or civil partner could or did benefit from the settlement. See TCGA92/S77 and CG34722. This special treatment does not apply for 2008-09 onwards.

See CG33500+ for guidance on the treatment of settlements for vulnerable beneficiaries. For the years 2004-05 to 2007-08 the trustees’ gains are charged on the beneficiary in the same way that TCGA92/S77 charges the settlor if he or she can benefit from the settlement. For 2008-09 onwards the charge is on the trustees at the rates shown below but a credit is given if the beneficiary would be charged a lower amount of Capital Gains Tax.

See CG38400+ for guidance on the taxation of non-resident settlements. Capital Gains Tax is not charged on the trustees but there can be a charge on either the settlor or beneficiaries of a non-resident settlement.

Rates of Capital Gains Tax

For the years 1998-99 to 2007-08 trustees are charged to Capital Gains Tax at the rate applicable to trusts. For the years 1998-99 to 2003-04 the rate is 34 per cent. For the years 2004-05 to 2007-08 the rate is 40 per cent.

For the years 2008-09 and 2009-10 trustees are charged at the Capital Gains Tax rate of 18 per cent.

For the year 2010-11 the rate of Capital Gains Tax depends on when the disposal occurred. Gains on disposals made on or before 22 June 2010 are taxed at 18 per cent. For disposals made on or after 23 June 2010 the rate of Capital Gains Tax depends on whether entrepreneurs’ relief is claimed. If entrepreneurs’ relief is claimed the gain is taxed at 10 per cent. If the gain does not qualify for entrepreneurs’ relief it is taxed at 28 per cent.

For the years 2011-12 onwards a gain on which entrepreneurs’ relief is claimed is taxed at 10 per cent. If the gain does not qualify for entrepreneurs’ relief it is taxed at 28 per cent.

From 2016-17 the Capital Gains Tax rate for trustees remained at 28 per cent on upper rate gains and 20 per cent on other gains. In broad terms upper rate gains are on the disposals of interests in residential property and carried interest see CG10246.