CheckLists.Tax (beta)
i5. Disposal of trust asset
INCOME TAX
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Settlements legislation: attribution of income to settlor
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- Offshore income gains treated as income of settlor's child if child would be absolutely entitled but for being a minor
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Legislation: ITTOIA s.632;
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CAPITAL GAINS TAX
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Reliefs
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- Holdover relief on distribution of trading asset to beneficiary
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Distribution by non-resident trustees can qualify
- "The transferor does not need to be resident in the UK. The relief is available for trustees of non-resident settlements, where the chargeable gain would, or might otherwise be, charged on UK residents." (HS295, §5).
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See also: HS295;
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Attribution of non-resident trust gains to UK resident settlor (s.86)
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Matching gains to benefits of non-resident trust (s.87)
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- Gain arising to trustees matched to earlier capital payment/benefit
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- A gain arising to a non-resident trust that has earlier unmatched capital payment/benefits will lead to matching under s.87.
- See i9. Benefits provided by trust.
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- XX
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XX
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INHERITANCE TAX
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Gift with reservation of benefit
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- Apply tracing rules to identify new assets for GWR purposes
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- The GWR rules apply by reference to the property treated as comprised in the gift at that time (Sch 20, para 6(2)).
- See C2. Gift by an individual.
Legislation: FA 1986, Sch 20.
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