PTP's Tax Tip No 2 ' Distributions on an accumulation unit trust

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Q ' I am somewhat taken aback to discover that F(No.2)A 2005 allows for distributions on an accumulation unit trust to be added to base cost for CGT where they have been charged to income tax. This seems to be a fundamental change from what I had understood, and would have made a significant difference to my clients' CGT liabilities in recent years. Any ideas why this change has occurred?

A ' I am afraid that the change merely reflects majority opinion of how the law stood anyway. Certainly, most computations have treated the accumulated distributions as an addition to base cost for many years; HMRC appear to have merely discovered that the legislation did not work quite how they and most others thought, hence the amendment last year. One point that then becomes important is that the comput...

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