Taxation of Chargeable Gains Act 1992 Schedule 4B paragraph 8

The alternative condition for assets no longer part of the settled property

Paragraph 8 of Schedule 4B sets out the alternative condition that must be met for assets that have left the trust property, typically because they have been lost, destroyed, or become worthless, or because replacement trust assets now represent them.

• An asset that has left the trust can still satisfy the borrowing condition if it is treated as disposed of under section 24(1), which covers assets that are lost, destroyed, or have become of negligible value.
• Alternatively, the condition is met if one or more ordinary trust assets that collectively represent the departed asset either remain in the trust immediately after the material time or are themselves treated as disposed of under section 24(1).
• Where there has been a part disposal of an asset, the standard condition in paragraph 6(2)(b) and the alternative conditions in this paragraph can be applied in any combination to the part disposed of and the part retained.
• References to an asset in this paragraph include a part of an asset, allowing the rules to apply flexibly to partial interests and fractional holdings.