Taxation of Chargeable Gains Act 1992 section 169O

Amount of relief: special provisions for certain trust disposals

Section 169O limits the amount of Entrepreneurs' Relief available on a disposal of trust business assets where the qualifying beneficiary is not the only beneficiary with an interest in possession in the relevant settled property.

• Where other beneficiaries besides the qualifying beneficiary hold interests in possession in the settled property (or the relevant part of it), only a proportionate share of the gain qualifies for Entrepreneurs' Relief.
• The qualifying proportion is based on the qualifying beneficiary's share of the income from the part of the settled property that includes the assets disposed of, measured against the total income interests of all beneficiaries with interests in possession in that part.
• Only the interest that makes the beneficiary a qualifying beneficiary counts towards this calculation — any additional interests in the trust income held by the same person are ignored.
• The "material time" at which interests are measured is the end of the latest two-year qualifying period ending no earlier than three years before the date of disposal, during which the relevant conditions for trust business asset status were continuously met.