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HMRC internal manual

Capital Gains Manual

Absolute entitlement: losses of trustees: entitlement before 16 June 1999

TCGA92/S71 (2)

This paragraph and the next apply where absolute entitlement occurs before 16 June1999.On the occasion when a beneficiary becomes absolutely entitled to anysettled property as against the trustee, any allowable losses (including losses broughtforward) which

  1. have arisen
i) on assets to which the beneficiary then becomes absolutely entitled, that is, as a result of the operation of TCGA92/S71 (1), or  
ii) on assets in which the beneficiary's share of the fund was previously invested,  
  1. cannot be deducted from gains accruing to the trustees on or before that deemed disposal of assets under Section 71(1),

are to be transferred to the beneficiary, and treated as losses accruing to thebeneficiary on the date of absolute entitlement. The beneficiary can therefore set themagainst losses accruing to him earlier in the same tax year. Losses so transferred are nolonger available to the trustees. See CG15812 - CG15813 about quantifying losses.