Taxation of Chargeable Gains Act 1992 section 68B

Transfer between settlements: identification of settlor

Section 68B identifies who is treated as the settlor when property is transferred from one settlement to another, other than at full value or on arm's length terms.

• When trustees of one settlement transfer property to another settlement not at full value or arm's length, the original settlor(s) are treated as having made the receiving settlement, each being attributed a proportionate share of the transferred property where there are multiple settlors.
• Where the transferred property was originally provided for the purposes of the first settlement (or derives from such property), it is treated as having been provided for the purposes of the receiving settlement by the same person(s) who originally provided it.
• Three situations are excluded from these rules: where a beneficiary assigns their interest to the second settlement (making the beneficiary the settlor), where a person exercises a general power of appointment (making that person the settlor), and where the separate rules in section 68C(6) concerning variations of wills or intestacy apply.
• The connected persons rule in section 18(2) is disregarded when deciding whether this section applies, so a sale between connected settlements at full market value can still fall outside the section.