Taxation of Chargeable Gains Act 1992 section 83

Trustees ceasing to be liable to UK tax

Section 83 deals with the deemed disposal and reacquisition of assets when trustees of a settlement remain UK resident but become treated as resident in another territory under a double taxation agreement, thereby escaping UK tax on gains from certain settled property.

• The section applies where trustees remain UK resident but become dual-resident under a double taxation agreement, with the result that they are treated as not liable to UK capital gains tax on certain assets of the settlement.
• The assets that fall outside the charge to UK tax as a result of the double taxation agreement are referred to as "relevant assets."
• Immediately before the point at which the trustees become exempt from UK tax on those assets, they are deemed to have disposed of all relevant assets and immediately reacquired them at market value.
• This deemed disposal crystallises any accrued gains (or losses) on those assets up to that point, ensuring they are brought into charge to UK capital gains tax before the treaty exemption takes effect.