However, an exemption is available where an asset is transferred and the beneficiaries and terms of both the transfer trust and the recipient trust are the same.

It may be possible, therefore, to avoid CGT on the transfer of an asset between two related trusts, provided the trusts are almost identical.  Great care is needed, because the consequences of a mistake can be a quite significant tax assessment.

Some family trusts are getting to the end of the business life of the key driver of the enterprise and now want to split up the business.  If it is held in a trust, these cloning rules may help.