Income Tax (Trading and Other Income) Act 2005 section 643D

Reduction in section 643A income: previous capital gains tax charge

Section 643D provides relief from double taxation where benefits received from a settlement have already been subject to a capital gains tax charge, by reducing the amount treated as the settlor's income.

• Where benefits from a settlement trigger both an income tax charge on the settlor and a capital gains tax charge on a beneficiary, this section prevents the same amounts being taxed twice.
• If chargeable gains are attributed to a person under the trust gains rules (sections 87, 87K, 87L, 89(2) or Schedule 4C paragraph 8 of TCGA 1992) by reference to benefits provided from the settlement, the amount of those gains is deducted when calculating the settlor's untaxed benefits total.
• The deduction applies at Step 3(d) of the section 643B calculation for any tax year after the year in which the chargeable gains are treated as accruing.
• Offshore income gains treated as arising to the individual under regulations 20 and 22 to 24 of the Offshore Funds (Tax) Regulations 2009 are also covered by this relief.