Taxation of Chargeable Gains Act 1992 section 70

Transfers into settlement

Section 70 establishes that when assets are transferred into a settlement, the transfer counts as a disposal of the entire property for capital gains tax purposes, regardless of the transferor's continuing involvement.

• Any transfer of assets into a settlement is treated as a disposal of the entire property, which then becomes settled property subject to the trust's capital gains tax rules.
• This treatment applies whether the settlement is revocable (meaning the transferor can take the assets back) or irrevocable (meaning the transfer is permanent).
• The transfer is still treated as a full disposal even if the person making the transfer retains a beneficial interest under the settlement — for example, if they are named as one of the beneficiaries.
• The transfer is also treated as a full disposal even if the transferor serves as a trustee, or indeed the sole trustee, of the settlement.