HMRC v Quentin Skinner 2005 Settlement: An Update

We give an update following the recent decision regarding the availability of Entrepreneurs' Relief for trusts.

The Court of Appeal has overturned the previous decision of the Upper Tribunal ("UT") which confirmed that for a trust to benefit from Entrepreneurs' Relief ("ER") from Capital Gains Tax ("CGT"), a beneficiary must have held an interest in possession throughout the relevant period. That previous decision is summarised in our article of May 2021.

The Facts

Quentin Skinner made three separate settlements on 30 July 2015, and his sons, Ludovic Skinner, Rollo Skinner and Bruno Skinner each had an interest in possession in one of the settlements. An interest in possession means that the beneficiary is entitled to receive the income generated by the assets in the settlement, but they are not, (unless the trustees have the necessary powers), entitled to the capital absolutely.