CGT – trust problems and solutions

When considering the CGT position of a property held in trust, it may be useful to regard the trust as a separate entity subject to its own CGT rules. This is very much the philosophy behind s69(1) TCGA 1992, which provides that the trustees are to be regarded as a single person, separate and distinct from the individuals who may from time-to-time be trustees, and separate also from the beneficiaries. In accordance with this principle, s70 TCGA 1992 expressly provides that a gift into settlement is a disposal for CGT purposes and at the other end of the settlement life, s71 TCGA 1992 provides that the trustees are deemed to dispose of assets to which beneficiaries become absolutely entitled. It might seem that these latter provisions are statements of the obvious, if not redundant. A gift, whether into settlement or not, would surely be a disposal within the ordinary meaning of the word, and most of the events leading to an absolute entitled would probably also be, or be closely accompanied by what on any interpretation will be an actual disposal of the assets concerned.