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CG35510 | Tusts and Capital Gains Tax: Trusts with vulnerable beneficiaries: Excluded cases Income Tax and CGT

From HM Revenue & Customs · Capital Gains Manual

For income tax:

The special treatment does not apply if the property in question is property in which the settlor is regarded as having an interest for the purposes of ITTOIA/S624 and S625, (FA2005/S25(3)).

For CGT:

The special treatment does not apply if

  • the vulnerable person dies during the year, see FA 2005/S30(3),or

  • the trustees would not be chargeable to CGT in respect of the chargeable gains. See FA2005/S30(1)(b). The reference to the trustees not being chargeable is a reference to their having no net chargeable gains. If their chargeable gains are less than the annual exempt amount the special treatment does apply as such gains are still chargeable to CGT.