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HMRC internal manual

Capital Gains Manual

Demergers: direct demergers: CGT treatment: trustees

Where the shares in the distributing company are held by trustees, the treatment for Capital Gains Tax purposes depends upon:

  • The law governing the trust (for example, England & Wales or Scotland).
  • The type of interests which the beneficiaries have (interests in possession or not).
  • The type of exempt demerger (direct or indirect).
  • Whether the demerged or issued shares are received as income or capital in the hands of the trustees for the purposes of trust law.

In the case of a bare trust, see CG34300+, the normal rules for individuals apply, see CG33920.