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HMRC internal manual

Capital Gains Manual

Absolute entitlement: but for being an infant

Where a beneficiary would have become absolutely entitled as against the trustee, but for being an infant, TCGA92/S71 (3) makes it clear that there is on that occasion a deemed disposal by the trustees under Section 71 (1). The beneficiary is now within Section 60. He or she is treated as having acquired the assets in question for Capital Gains Tax purposes on that occasion.

Section 71(3) was enacted in 1981 to avoid possible doubts. It is considered that it was declaratory of the existing law. It should therefore be treated as always having applied, even in cases which were settled on the incorrect basis that there was no disposal on that occasion.