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HMRC internal manual

Capital Gains Manual

Disposals by trustees: Expenses: incidental costs of ending or varying settlement

TCGA92/S38 (2)

CG15250+ sets out the basic types of expenditure allowable as `incidental costs’ of making an acquisition or disposal under TCGA92/S38. As well as costs incurred in the ordinary course of buying and selling trust investments trustees may also incur costs when a settlement ends or is varied.

Incidental costs’ include the costs of legal and actuarial services including Stamp Duty on transfers and ancillary expenses incurred in varying or ending a settlement (see CIR V Chubb’s Trustee, 47TC353), or upon the termination of an interest in possession.

The allowable expenditure may include fees in respect of discharges and commission on the transfer of assets to beneficiaries, but not insurance premiums, see Allison v Murray, 51TC57.

The expenditure should be apportioned between chargeable and non-chargeable assets by reference to value.

The withdrawal fees charged by the trust departments of banks etc usually relate largely to general administrative costs which are not allowable. The amounts shown in SP02/04, see CG33524 cover the element of withdrawal fees relating to the actual work done on valuation or transfer of assets.