Taxation of Chargeable Gains Act 1992 section 169VL

Cap on relief for disposal by trustees of a settlement

Section 169VL imposes a lifetime cap of £1 million on the amount of investors' relief that can be claimed in respect of disposals made by the trustees of a settlement, measured by reference to each eligible beneficiary.

• Where trustees of a settlement make a qualifying disposal of shares, the investors' relief rate of capital gains tax (10%) applies only up to a cumulative lifetime limit of £1 million per eligible beneficiary.
• The £1 million cap takes into account the current trust gain, any previous gains on the individual beneficiary's own disposals that benefited from investors' relief, and any previous trust gains attributable to that beneficiary that were charged at the investors' relief rate.
• If the current trust gain, when added to these earlier amounts, exceeds £1 million, only the portion that falls within the £1 million ceiling qualifies for the reduced rate; the excess is taxed at the normal capital gains tax rates.
• Where a trust has multiple eligible beneficiaries and relief is apportioned, the amount counted against each beneficiary's cap is their individual share of the gain rather than the whole trust gain.