Taxes Consolidation Act 1997 section 575

Gifts in settlement

Section 575 provides that a gift of property into a trust (settlement) is treated as a disposal of the entire property for capital gains tax purposes, regardless of any interest retained by the donor.

• A gift of property into a settlement, whether revocable or irrevocable, is treated as a disposal of the entire property that becomes settled property.
• The disposal applies even where the donor retains an interest as a beneficiary under the settlement.
• The disposal also applies where the donor acts as trustee, or is the sole trustee, of the settlement.
• The effect is that a charge to capital gains tax arises on the gift, based on the market value of the whole property transferred into the trust.