Taxation of Chargeable Gains Act 1992 Schedule A1 paragraph 7

Persons who are eligible beneficiaries

Paragraph 7 of Schedule A1 defines who qualifies as an "eligible beneficiary" for the purposes of the schedule, which is relevant to determining whether certain trust-related gains qualify for particular tax treatment.

• An eligible beneficiary is an individual who has an interest in possession in the settled property, meaning they have a current right to benefit from the trust assets or income.
• The definition ensures that only individuals with a direct, present entitlement under the trust — rather than a future or contingent interest — are treated as eligible beneficiaries.
• This concept is important because the tax treatment of chargeable gains arising within a trust can depend on whether the trust has eligible beneficiaries and who those beneficiaries are.
• The provision was amended by the Finance Act 2008, Schedule 2, paragraph 45, which updated the rules in line with wider reforms to the taxation of trusts.