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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

2006 IHT changes: IHT and CGT treatment from 22 March 2006: transfers from settlements

Transfers from trustees of settlements to individuals other than on termination ofinterest in possession on death:

| Type of transferor trust for IHT | Chargeable
transfer for
IHT? | Disposal
for CGT? | Can Holdover
Relief be

claimed? | || | Cases subject to qualifying IIP treatment:
transferee or spouse or civil partner
becomes absolutely entitled | No | Yes | S165 possible | | Cases subject to qualifying IIP treatment:
other | Potentially
Exempt
Transfer | Yes | S165 possible | | Disabled Trust: transfer to person with
deemed IIP or spouse or civil partner | No | Yes | S165 possible | | Disabled Trust: transfer to other person | Potentially
Exempt
Transfer | Yes | S165 possible | | Bereaved Minor Trust: transfer to
bereaved minor | No | Yes | S260(2)(da) | | Bereaved Minor Trust: transfer on death of
bereaved minor | No | Yes | S260(2)(da) | | Bereaved Minor Trust: other transfer
(through statutory power of advancement) | Yes | Yes | S260(2)(a) | | A&M Trust (pre 22 March 2006) transfer to
relevant beneficiary | No | Yes | S260(2)(d) | | A&M Trust (pre 22 March 2006): transfer
on death of relevant beneficiary | No | Yes | S260(2)(d) | | A&M Trust (pre 22 March 2006): other
transfer (through statutory power of
advancement) | Yes | Yes | S260(2)(a) | | 18-25 Trust: transfer to relevant
beneficiary when under 18 | No | Yes | S260(2)(db) | | 18-25 Trust: transfer on death of relevant
beneficiary when under 18 | No | Yes | S260(2)(db) | | 18-25 Trust: transfer to relevant
beneficiary when over 18 | Yes | Yes | S260(2)(a) | | 18-25 Trust: transfer on death of relevant
beneficiary when over 18 | Yes | Yes | S260(2)(a) | | 18-25 Trust: other transfer (through
statutory power of advancement) | Yes | Yes | S260(2)(a) | | Relevant property Trust: settlor etc interest | Yes also gift
with
reservation
depending on
assets | Yes | S260(2)(a) | | Relevant Property Trust: no settlor interest | Yes | Yes | S260(2)(a) | | Relevant Property Trust: within 90 days of
ten year charge | No | Yes | S165 possible |

Note that TCGA92/S165 is only available for certain assets.

S165 and S260 do not apply to transfers to most settlements where the settlor or spouse orcivil partner or minor child or minor step-child (unless married or in a civilpartnership) can or do benefit.

For types of trust see CG36541.