Section 169J — Taxation of Chargeable Gains Act 1992: Disposal of trust business assets

Disposal of trust business assets 169J 1 There is a disposal of trust business assets where—

a the trustees of a settlement make a disposal of settlement business assets (see subsection (2)),

b there is an individual who is a qualifying beneficiary (see subsection (3)),

and c the relevant condition is met (see subsections (4) and (5)).

2 In this Chapter “ settlement business assets ” means—

a assets consisting of (or of interests in) shares in or securities of a company, or b assets (or interests in assets) used or previously used for the purposes of a business, which are part of the settled property.

3 An individual is a qualifying beneficiary if the individual has, under the settlement, an interest in possession (otherwise than for a fixed term) in—

a the whole of the settled property, or b a part of it which consists of or includes the settlement business assets disposed of.

4 In relation to a disposal of settlement business assets within paragraph (a) of subsection (2) the relevant condition is that, throughout a period of 2 years ending not earlier than 3 years before the date of the disposal—

a the company is the qualifying beneficiary's personal company and is either a trading company or the holding company of a trading group, and b the qualifying beneficiary is an officer or employee of the company or (if the company is a member of a group of companies) of one or more companies which are members of the trading group.

5 In relation to a disposal of settlement business assets within paragraph (b) of that subsection, the relevant condition is that—

a the settlement business assets are used for the purposes of the business carried on by the qualifying beneficiary throughout the period of 2 years ending not earlier than 3 years before the date of the disposal, and b the qualifying beneficiary ceases to carry on the business on the date of the disposal or within the period of three years before that date.

6 In subsection (5)—

a the reference to a business carried on by the qualifying beneficiary includes a business carried on by a partnership of which the qualifying beneficiary is a member, and b the reference to the qualifying beneficiary ceasing to carry on the business includes the qualifying beneficiary ceasing to be a member of the partnership or the partnership ceasing to carry on the business.