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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Basic terms of trust law as applied to CGT: trust

A `TRUST’ is an obligation binding a person (a `TRUSTEE’) to deal with property in particular ways, for specific purposes or for the benefit of persons or classes of persons (the `BENEFICIARIES’), whose interests are protected by the equitable jurisdiction of the Courts. The settlor may be a beneficiary or a trustee.

If in any case you are unsure whether a trust exists, and it is material for Income Tax or Capital Gains Tax purposes, advice should be sought from HMRC Trusts & Estates Technical Edinburgh except in the cases described in the next subparagraph. In particular extreme care should be exercised before accepting that an oral trust exists. Certain arrangements, in particular a lease for life, are treated as trusts for Inheritance Tax purposes. This does not mean that they are trusts for Capital Gains Tax.

If the case is concerned only with a claim to private residence relief under TCGA92/S225, see CG65400+, advice should be sought from Capital Gains Technical Group.