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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Meaning of 'ordinary trust assets'


‘Ordinary trust assets’ are:

  1. Shares or securities as defined in TCGA92/S132.
  2. Tangible property, movable or immovable, or a lease over such property.
  3. Property not in (a) or (b) used for the purposes of a trade or profession carried by the trustees or a beneficiary with an interest in possession in the settled property.
  4. Any right or interest in or over property within (b) or (c).

This definition is narrower than the usual definition of asset for Capital Gains Tax as all forms of property including “options, debts and incorporeal property generally”, TCGA92/S21. Options, debts and incorporeal property are not ordinary trust assets. This means insurance policies and futures contracts are not ordinary trust assets. If the only trust property is an insurance policy taken out by the trustees there may be no gain on its disposal anyway.

Units in a unit trust and interests in certain offshore funds are ordinary trust assets because they are treated as shares in a company, TCGA92/S99 and TCGA92/S103A.

Loans made by the trustees are not ordinary trust assets unless they are securities. A loan to a company that is wholly-owned by the trustees would not be a payment in respect of an ordinary trust asset. A subscription for shares or securities in the company would qualify.