VAT is not my field, but I fear it is in point.
This is clearly whisky acquired for the purpose of trade. Could TCGA s.161(3) be the answer?
What about funding VAT?
Valuations at all relevant dates will be required
Is there a legal question in relation to licences to deal in spirits.
Leaving aside the question of unlicensed dealing in spirits, it is difficult to see what the purpose of the original acquisition [possibly excluding the legal settlement acquisition]could have been other than the acquisition of a trading asset. I suspect the legal settlement barrels would fall into the same analysis, as the question is not the consideration for the
acquisition, but its purpose.
So we have a simple, if uncomfortable situation, because a disposal to whomever would give rise to an income tax gain, although that may be deferred by an election under TCGA s161(3) .
Valuations and computations at all dates will be required- no separate valuation required in respect of the "angels' share".
Sorry, comment withdrawn
Just a bit of light reading
If we are dealing with bare trusts, then they are ignored as settlements for CT-see https://www.gov.uk/government/publications/trusts-and-capital-gains-tax-....
In this case it is the beneficiary who is treated as the disponor, with a full personal CGT allowance.
ps. I have read Principia Mathematica-well the first page!
a)Why 3 Settlements? Two established under the will, and one lifetime settlement..
That settlement incidentally has two exempt bands, one from each settlor- so it has (1/3 +1)*half the personal exempt band - unless the widow has settled another trust.
Each of the two Will trusts enjoys 1/3* half the personal exempt band, which is the original question asked
b)Trusts are settlements for tax purposes. Formally the legislation always refers to settlements, which term encompasses "arrangements".
c]The references to IHT were to highlight that tax in connection with one settlement can be affected by another settlement not only for CGT purposes . Quite specifically two non IIP trusts carved out of an Estate are treated for IHT as one-which can give rise to problems if they have different trustees, for example
For CGT there are three trusts.
The will is not a trust , but a single disposition[by the deceased] onto two separate trusts
For IHT the nil rate band trust established under the will is valued at each decennial anniversary ; the life interest trust is not aggregated as it is an IIP trust.
If the nil rate band trust is continued as an ongoing trust, any IHT exemption at death by virtue of BPR or APR is ignored in computing any exit or decennial charge for IHT if the assets held in the trust no longer qualify for such relief.
Something about knickers in a twist here.
HMRC have no problems in answering the question in a sensible way
Other end of the spectrum. Plc subsidiary pays insurance premium to offshore captive insurance in respect of future warranty claims. Business ceases. When warranty period expires, entire insurance company reserves flow back to plc tax free!