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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Direct demergers: trustees interests in possession: other countries

If a trust is governed neither by the law of any part of the United Kingdom, nor by the law of the Irish Republic, then the trustees will need to consider the precise interests of the person or persons with an interest in possession. If that person is immediately entitled to the demerged shares, then the trustees and beneficiary fall to be treated in accordance with CG33931 above. If on the other hand the rights of the beneficiary are similar to those of the taxpayer in Garland v Archer-Shee, 15TC693, then the trustees and beneficiary fall to be treated in exactly the same way as those of liferenter trusts under CG33933 above. In small cases it may be assumed that the treatment adopted by the trustees is correct.