Meeting Points

Main speakers: Barry McCutcheon barrister Grays Inn Square; Patrick Soares barrister Grays Inn Square.

Guest speaker: John Avery Jones CBE solicitor Speechly Bircham.

The double flip-flop

The anti-flip-flop provisions (Schedule 4B to the Taxation of Chargeable Gains Act 1992) require a 'trustee borrowing' before they can apply.

Under paragraph 4(1)(a) of Schedule 4B money or other assets must be lent to the trustees (or certain assets transferred to them which they must restore to the transferor: paragraph 4(1)(b)). Therefore if the loan is made to an underlying company which can make gifts – e.g. the trustees' overseas guarantee company – then the company can make the borrowing and advance the same by way of gift to the United Kingdom settlement with the settlor etc. then being excluded from benefit. In the next year the gain can be made when...