Taxes Consolidation Act 1997 section 578

Death of annuitant

Section 578 applies the rules on the termination of a life interest to an annuity that ends on the death of the annuitant.

• Where an annuity (not being a life interest) terminates on the death of the annuitant, the same CGT rules apply as on the death of the holder of a life interest
• If the underlying property passes to a person absolutely, the assets are deemed disposed of and reacquired by the trustee as bare trustee, with no CGT charge arising
• The deemed reacquisition is treated as being at market value at the date of death
• If the property reverts into the settlement, the assets are deemed disposed of and reacquired at market value, and a CGT charge may arise on the trustee