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HMRC internal manual

Trusts, Settlements and Estates Manual

Capital items that are income for tax purposes: profit on sale of certificate of deposit


Profits and gains on the sale of certificates of deposit are capital in trust law. But, they are treated as income for income tax purposes. For periods to 5 April 2006, they are not liable at the special trust rate even if the trustees are normally liable at that rate. For periods from 6 April 2006 they are liable at the special trust rate in both discretionary and non-discretionary trusts (ITA/Sections 481 and 482) but not in the case of unauthorised unit trusts, where they remain chargeable at basic rate.