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Tax treatment of mixed trusts

18 September 2023 / Steve Sanders
Issue: 4905 / Categories: Comment & Analysis , ATT , Capital gains tax , TCGA 1992 , Trusts
Mixing things up

Key points

  • The ATT paper 5 exam could potentially include a question which tests your knowledge on discretionary trusts and IIP trusts at the same time.
  • A mixed trust is a ‘hybrid’ – a combination of more than one type of trust. Typically part discretionary part interest in possession trust.
  • The different parts of the trust are taxed according to the rules that apply to each part. No special rules apply.
  • In a mixed trust scenario it may be necessary to determine the IHT status of the trust before deciding whether CGT holdover relief is available on an appointment of assets.

What is a ‘mixed trust? Before we answer this question we need to take a step back and look at the main characteristics of the two main types of trust you are likely to be faced with in your ATT paper 5 examination – these being...

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