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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Gifts: Finance Act 2004 changes: gifts to certain settlements: clawback of relief if settlement becomes settlor-interested or a relevant individual has an interest in the settlement: consequential tax adjustments

If the circumstances described in CG66920 or CG66920A arise, in that there is a clawback of previously-obtained hold-over relief in relation to a relevant disposal (see CG66921C) to the trustees of a settlement, the chargeable gains and allowable losses of the trustees for any tax year ending after the relevant disposal was made will be determined on the basis that no hold-over relief was obtained in relation to that disposal.

Additionally, the chargeable gains and allowable losses of any person (and this will include any person involved in a chain of transfers) who acquires any property (either directly or indirectly) from the trustees for any chargeable period ending after the date of the relevant disposal will be determined on the basis that no hold-over relief was obtained in relation to the relevant disposal.

All such adjustments as are required are to be made, whether by discharge or repayment of tax, notwithstanding any limitation on the time within which any adjustment may be made.

[TCGA92/S169C (9)]