Trusts in the United Kingdom created on or after 6 April 2010 when the Perpetuities and Accumulations Act 2009 came into force automatically have a perpetuity period of 125 years even if the trust document specifies a different period. It is not allowed to extend the perpetuity period of trust created before this date.
However the High Court has approved a variation extending the period of a trust to 125 years by exercising its discretion under the Variation of Trust Act 1958, which allows that a new perpetuity period can be permitted under present law even if it was not permitted when the trust was created.
The HMRC have now ruled that this action did not amount to a resettlement and therefore does not trigger a capital gains tax (CGT) charge on the basis that the Variation of Trusts Act 1958 does not allow the court to approve a resettlement.
If you have questions concerning the perpetuity period on trusts or any other trust questions please do not hesitate to contact us.