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HMRC internal manual

Capital Gains Manual

Change of residence

If the residence of the persons who are actually trustees changes it is possible for the residence of the settlement to change. This is most likely to happen if one set of trustees resigns and new trustees are appointed.

The residence of a settlement can change during a tax year. See the example in CG38400. This contrasts with the position of individuals. Since 2013-14 an individual cannot change his or her tax residence during a tax year. Split year treatment does not apply to trustees. If an individual trustee is entitled to split year treatment TCGA92/S69(2DA) may apply to prevent a non-resident settlement becoming UK resident even though at no time has it had a trustee who is actually resident in the UK.


Mr and Mrs Smith are trustees of the Smith family settlement. Mr and Mrs Smith live in New Zealand and the trust is not resident in the UK. In August 2015 Mr and Mrs Smith have to return to the UK unexpectedly to deal with a family crisis. Before they leave New Zealand they resign as trustees and are replaced by New Zealand resident trustees.

Under the statutory residence test Mr and Mrs Smith are treated as resident in the UK for the tax year 2015-16. That means the Smith family trust is liable to Capital Gains Tax on any gains made in the year because the trustees were UK resident during part of 2015-16. Mr and Mrs Smith are entitled to split-year treatment in 2015-16. Because they resigned as trustees during the overseas part of the split-year TCGA92/S69(2DA) applies. For the purposes of determining the residence of the settlement they are treated as not resident in the UK.