Trusts: outline of CGT for trusts: interests of beneficiaries
The interest of a beneficiary in a settlement is a form of property. Therefore, without aspecific provision, the disposal or realization of such an interest would be a disposal ofan asset for the purposes of CGT. This however would mean that there would be two chargeswhen a person became absolutely entitled to property, the commonest case of realizing aninterest, since the trustees would be liable because the beneficiary had become absolutelyentitled.
Therefore in general a beneficiary is exempt when an interest in a settlement is disposedof. There are three exceptions.
- where the beneficiary acquired the interest for payment or derives his title to the interest from someone who acquired it for payment, see CG38012,
- where the interest is in a non-resident settlement, see CG38060, and
- where the interest is in a settlement that has been non-resident, see CG38064.