Paul Hewitt, Paola Fudakowska & Adam Cloherty report from the courts
In Futter and Cutbill v Futter and HMRC [2010] EWHC 449 (Ch)
Mr Futter set up the No 3 and the No 5 Settlements of which he was entitled to the income for life. It was intended to bring both settlements onshore after 5 April 2008 which would trigger a 28.8% capital gains tax (CGT) liability. He was advised that the CGT liability on termination of the No 3 Settlement could be avoided if sufficient losses on his personal portfolio were generated and offset against the maximum “stockpiled gains” in the trust that would be attributed to him on distribution of the trust fund to him.
Section 87 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) applies to settlements where the trustees are not resident or ordinarily resident in the UK. TCGA 1992, s 87(2) says that there shall be computed in respect of every year of assessment the amount on which the trustees would have been chargeable to CGT if they had been resident and ordinarily resident: these
