½Û×ÓÊÓƵ

Conditions for Schedule 4B to apply

Anti-avoidance provisions apply if there are assets leaving a non-resident trust, other than by way of arm's length sales, with the trustees being in debt in respect of borrowings that were not used for narrowly defined purposes.

This anti-avoidance legislation applies if three basic conditions are met¹:

1. Ìý

   •ÌýÌýÌýÌý the trustees of a settlement (that is within the settlor charge² or beneficiary capital payment³ provisions) make a 'transfer of value' on or after 21 March 2000⁴ by transferring value out of the settlement by transferring cash or assets for no consideration or by making a loan

2. Ìý

   •ÌýÌýÌýÌý at the time of the transfer the trustees have outstanding debt

3. Ìý

   •ÌýÌýÌýÌý the proceeds of the borrowing have not been used for normal trust purposes (see I5.1259)

Where these conditions are met, the trustees are deemed to have sold and reacquired at market value all (or a proportion) of the chargeable assets left in the trust⁵