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HMRC internal manual

Capital Gains Manual

Direct demergers: trustees interests in possession: Scotland

If the demerged shares are income of a trust governed by Scottish Law, however, the position differs. The liferenter (or person with a similar interest in possession) of a trust governed by Scottish law is not immediately entitled to the demerged shares. The right of a liferenter is a personal right to compel the trustees to administer the trust in accordance with the directions of the truster (settlor in English terminology). If the trustees decide to distribute the demerged shares to the liferenter, rather than the cash equivalent, then there is for CGT purposes a disposal by them at market value, and the chargeable gain would fall to be computed in accordance with CG33935 - CG33936 below.