RE: Trade11 Oct 2024 09:04
From a tax planning site, note paragraph 3
he disposal of assets into a trust is a chargeable disposal for capital gains tax purposes and therefore a capital gain would arise. As the settlor is deemed to be 'connected' with the trust, and proceeds would be deemed to be equivalent to the market value of the assets transferred, it would therefore not be possible to avoid capital gains tax by simply gifting the assets.
The most effective way of establishing a trust from a capital gains tax perspective would be to invest cash and let the trustees use this to invest as they see fit (in accordance with the trust deed). Since the asset gifted is cash, it falls outside the scope of capital gains tax.
Another possibility would be to settle assets that have a low initial value but which are expected to show significant growth in value. An example is shares in a newly formed company. Any growth in the value of the shares would occur offshore and, subject to the anti-avoidance rules, be outside the scope of UK capital gains tax.