Trust Modernisation

The Paymaster General, Dawn Primarolo, announced on 9 October in a Written Statement to Parliament that the Government intended to bring forward legislation in Finance Bill 2007 to amend an omission which had been identified in the recent Trust Modernisation legislation included in the Finance Act 2006. This omission relates to payments received by trustees which are made by a company buying back its own shares.

A second small omission has since been identified in the 2006 legislation relating to a further category of capital receipt within section 686A Income and Corporation Taxes Act 1988 which is treated as income in the hands of the trustees - chargeable event gains arising from some types of life insurance policy, capital redemption policy or life annuity contract.

The draft amending legislation for both omissions is now published for comment. Please send any responses by 28 February to:

Andrew Hayward
Charity, Assets and Residence
HM Revenue and Customs
Room G45
100 Parliament Street
London
SW1A 2BQ

E-mail: Andrew Hayward