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HMRC internal manual

Capital Gains Manual

UK resident beneficiary: tax years 2004-05 to 2007-08

For the years 2004-05 to 2007-08 the method of dealing with chargeable gains where the beneficiary is resident in the UK is quite different from the method adopted for income tax. The rules for income tax are at TESM 3471+.

FA2005/S31, before it was amended by FA08, provides that TCGA92/S77(1) and S78 and S79 (apart from the notice provision in subsection (6)) shall apply as if

  • the vulnerable person were a settlor
  • the settled property disposed of and any other settled property disposed of at a time when it was “relevant settled property” originated from him, and
  • he had an interest in the settlement during the tax year.

Property is “relevant settled property” if it is held on “qualifying trusts” (see CG35503 and TSEM3430+ and TSEM 3435+) for the benefit of the vulnerable person and apart from the special provisions the trustees would be chargeable to CGT in respect of any chargeable gains accruing to them from on any disposals, see CG35510.