Taxation of Chargeable Gains Act 1992 Schedule A1 paragraph 20

General rules for settlements

Paragraph 20 of Schedule A1 sets out the general rules that apply when calculating taper relief on chargeable gains arising within settlements (trusts).

• Taper relief reduces the percentage of a chargeable gain that is taxable, based on how long an asset has been held by the trustees of a settlement.
• The qualifying holding period for taper relief purposes runs from when the trustees of the settlement acquired the asset, and the rules for counting whole years mirror those applying to individuals.
• Where assets are held in a settlement, the trustees are treated as a single continuing body of persons, so changes in the identity of individual trustees do not restart the taper relief clock.
• The distinction between business assets and non-business assets is relevant to settlements just as it is to individuals, with business assets attracting a more generous rate of taper relief over a shorter holding period.