Taxation of Chargeable Gains Act 1992 section 169VI

Disposals by trustees: relief reduced in certain cases

Section 169VI limits the amount of investors' relief available when trustees dispose of qualifying shares and more than one person holds an interest in possession in the settled property, so that relief only covers the share of the gain attributable to eligible beneficiaries.

• Where trustees make a qualifying disposal of shares and two or more persons hold interests in possession in the settled property, investors' relief is restricted to the portion of the gain attributable to eligible beneficiaries rather than the whole gain.
• If there is a single eligible beneficiary, relief applies only to that beneficiary's proportionate share of the gain; if there are multiple eligible beneficiaries, relief applies to the aggregate of their individual shares.
• Each eligible beneficiary's share is calculated as a proportion: their individual interest in possession in the income from the shares (X) divided by the total of all interests in possession in that income held under the settlement (Y), applied to the overall gain.
• Only interests in possession that are not for a fixed term count towards the calculation, and the interests are measured at the moment immediately before the disposal takes place.