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HMRC internal manual

Capital Gains Manual

Death of person with interest in possession: property remains settled


On the termination of an interest in possession in settled property, see CG36320, by reason of the death of the person entitled to it, TCGA92/S72 (1) provides that the trustees of the settlement are deemed to dispose of and immediately reacquire the property which continues to be settled property. See CG36454 if it ceases to be settled property.

This disposal and re-acquisition by the trustees is deemed to take place at the market value at the date the interest terminates. No chargeable gain accrues to the trustees, unless there has previously been a claim to defer a charge to tax on the disposal of the settled property to the trustees, see CG36510.


  • CG36470 for cases where the interest was in part of the property only
  • CG36476 where the entitlement was to part of the income only

From 22 March 2006 this paragraph only applies to certain kinds of interest in possession, see CG36525.