Taxation of Chargeable Gains Act 1992 section Sch A1 para 19

Special rule for ancillary trust funds

Schedule A1 paragraph 19 sets out a special rule governing the taper relief treatment of gains arising in ancillary trust funds.

• An ancillary trust fund is a separate settlement that exists alongside a main settlement and is connected to it, typically holding assets for related but subsidiary purposes.
• Where a gain arises in an ancillary trust fund, the taper relief available on that gain is determined by reference to the period for which the asset was held across both the main fund and the ancillary fund combined.
• This rule prevents taxpayers from gaining an advantage or suffering a disadvantage in their taper relief entitlement simply because assets are held through an ancillary trust fund rather than the main settlement.
• The provision was amended by Schedule 2 paragraph 45 of the Finance Act 2008, which made consequential changes as part of the abolition of taper relief from April 2008 onwards.

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