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HMRC internal manual

Capital Gains Manual

Separate settlements: variations of trusts: by agreement

In such circumstances it is necessary to consider, in the light of the principles set out in the preceding paragraphs and also CG33290-33304, what the correct analysis is. The alternatives are

  • mere variation of the terms of the existing settlement
  • continuation of the old settlement as regards part of the property, with the remainder being held on one or more new settlements
  • termination of the old settlement in its entirety being replaced by one or more new settlements. This last is an unlikely analysis unless a significant part of the property is being distributed absolutely. In such circumstances it may be helpful to refer to Ewart v Taylor where one reason for the court holding that a new settlement had come into existence was that it was part of a scheme for winding up the old settlement. See 57TC at 468, Section I.See CG37900+ on the identity of the settlor.