Taxation of Chargeable Gains Act 1992 Schedule 5B paragraph 17

Trustees: general

Paragraph 17 extends the EIS CGT deferral relief provisions to trustees of settlements, setting out the conditions under which trustees can claim deferral relief and how the relief is calculated when not all beneficiaries are individuals.

• Trustees of settlements can claim EIS deferral relief on trust assets, with references to "individuals" throughout the Schedule treated as including trustees where the conditions are met
• The relief applies to discretionary trusts (no interests in possession) only if all beneficiaries are individuals, and to interest-in-possession trusts if at least one beneficiary is an individual
• Where an interest-in-possession trust has a mix of individual and non-individual beneficiaries, only a proportionate share of the gain qualifies for deferral, based on the ratio of income attributable to individual beneficiaries compared to total trust income
• Relief is denied if the nature of the beneficiaries' interests changes unfavourably between the disposal of the original asset and the acquisition of the EIS shares, for example if the trust ceases to qualify or if the relevant proportion of individual beneficiaries' interests decreases