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I5.1315 Disposal of interest in settled property

Subject to the rules relating to non-resident settlements (see below) the disposal of an interest in a settlement (including an annuity or a life interest or the reversion to an annuity or life interest¹) does not give rise to a chargeable gain unless the person disposing of the interest:

1. Ìý

   (a)ÌýÌýÌýÌý acquired it for a consideration in money or money's worth (other than a consideration consisting of another interest in the same settlement), or

2. Ìý

   (b)ÌýÌýÌýÌý derives his title from a person who so acquired the interest²

(Whether or not it falls within (a), the sale of an interest under a UK resident settlement in which the settlor has an interest may result in a deemed disposal of the underlying assets — see I5.1022.)

A person who has acquired an interest but is not entitled to this exemption is treated, on becoming absolutely entitled to any settled property as against the trustee, as disposing of the interest in consideration of the obtaining