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HMRC internal manual

Capital Gains Manual

Meaning of “originating” - TCGA92/S86


The concept of property originating from the settlor has two important functions.

  • A settlor is charged only on the gains that accrue on the disposal of property that originates from them, TCGA92/S86(1)(e).
  • A defined person will have an interest in a settlement only if they can enjoy a benefit from property originating from the settlor, TCGA92/Sch5/para2(2). See CG38465.

Property originating from a person means:

  • Property they have provided directly or indirectly, paragraph 8(2)(a) and (7).
  • Property that represents that property including accumulated income from the property, paragraph 8(2)(b) and (6). This will apply where the original trust property has been sold and the proceeds reinvested.
  • Property provided by another person under a reciprocal arrangement with the settlor, paragraph 8(3).

If it is not possible to distinguish property representing provided by the settlor from other property the amount provided by the settlor is identified on a just and reasonable basis, paragraph 8(1)(c).

Property provided by a company may also be treated as provided by the person or persons who control the company. See paragraph CG38505.