Taxation of Chargeable Gains Act 1992 Schedule 4A paragraph 10

Avoidance of double-counting

Schedule 4A paragraph 10 prevents a taxpayer from being taxed twice on the same economic event — once on the deemed disposal of trust assets under Schedule 4A and again on the actual disposal of an interest in settled property — by providing rules that determine which charge or relief takes priority.

• Where the actual disposal of the interest produces a chargeable gain exceeding the net deemed disposal gain (or there is no net deemed disposal gain), the deemed disposal rules are switched off and only the actual gain is taxed
• Where the net deemed disposal gain is larger, the deemed disposal rules apply instead and the actual gain on the interest is disregarded
• Where the actual disposal produces an allowable loss, the deemed disposal rules are switched off only if the net deemed disposal loss would be greater; otherwise the deemed disposal rules apply and the actual loss is disregarded
• Where the actual disposal produces neither a gain nor a loss, the deemed disposal rules apply unless the deemed disposal would produce a net allowable loss, in which case they are switched off