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HMRC internal manual

Capital Gains Manual

Absolute entitlement: example: Stephenson v Barclays Bank Trust Co

The trustees’ arguments were

i) that absolute entitlement had occurred before 1965, because the annuities were merely `outgoings’ under TCGA92/S60 (2), see CG34330. The judge rejected this argument. The annuities were interests under the settlement. The grandchildren were not then absolutely entitled because there were other beneficiaries with different interests.
ii) that absolute entitlement would only occur when the assets were distributed. This was held to be incorrect because Section 60(2) is clearly referring to a time when the settled property is still in the trustees’ hands. Therefore absolute entitlement must precede the actual transfer.
iii) that an individual grandchild had to be entitled to specific property. The judge considered that the two grandchildren together were entitled to the whole of the settled property. Therefore they were `jointly’ absolutely entitled as against the trustees when the deed was executed.