CG17946 - Taper relief: business asset: property settled by a company

TCGA92/SCHA1/PARA17

TCGA92/SCHA1/PARA17 applies to gains accruing to trustees of a settlement if:

• the settlor (as defined in ICTA88/S660G (1) & ICTA88/S660G(2)) is a company;

and

• the settlor, or an associated company, is an actual or potential beneficiary;

and

• the settlor or any associated company is within the charge to Corporation Tax on chargeable gains.

The language of this paragraph is very similar to that of TCGA92/S77. In case of difficulty you may find it helpful to consult CG34740+. The main difference however is that by using the definition in ICTA88/S660G(1) the paragraph applies to settlements made or entered into by a company even if there is no bounty.

Paragraph 17 prevents abuse of taper relief by companies. Without this anti-avoidance rule companies could obtain taper relief on their assets by placing them in trust. Indexation allowance would be frozen but this disadvantage would be greatly outweighed by access to taper relief, particularly business asset taper relief. In these circumstances the business asset taper will not be available.