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HMRC internal manual

Trusts, Settlements and Estates Manual

Legal background to trusts & estates: setting up a trust: capital gains

When a settlor puts assets into a trust inter vivos (between the living) he disposes of them. It is an occasion of charge for capital gains tax purposes (CG35710 onwards).

There is no charge when a testator’s assets go into a will trust. Death is not an occasion of charge (CG30320 onwards). For capital gains tax purposes, personal representatives are deemed to acquire the assets at the date of death. The deemed acquisition is at the market value (probate value).

The transfer to trustee is at the same value as when the personal representatives acquired the assets (CG31140).