Taxation of Chargeable Gains Act 1992 Schedule A1 paragraph 17

Special rule for property settled by a company

Paragraph 17 of Schedule A1 sets out a special rule that applies where a company has settled property into a trust, affecting how taper relief is calculated in relation to that settled property.

• Where a company settles property into a trust, a special rule modifies how taper relief applies to gains arising on disposals of assets held within that settlement.
• The rule ensures that the taper relief treatment reflects the nature of the asset as it was held by the company that originally settled the property, rather than its character in the hands of the trustees.
• This provision prevents the use of settlements by companies as a means of obtaining more favourable taper relief treatment than would otherwise be available.
• The rule was introduced as part of the taper relief regime under Schedule A1 and was subsequently amended by Finance Act 2008, Schedule 2, paragraph 45.