Taxation of Chargeable Gains Act 1992 Schedule 5 paragraphs 3–5B

Exceptions from section 86

Schedule 5 paragraphs 3 to 5B set out the circumstances in which section 86 (which attributes trust gains to a settlor who has an interest in a non-resident or dual-resident settlement) does not apply.

• Section 86 does not apply for any tax year in which the settlor dies.
• Where the settlor's only interest arises because property, income or benefits may flow to certain family members (a spouse or civil partner, child, grandchild, or the spouse or civil partner of a child or grandchild), section 86 does not apply if that family member dies during the year, or if during the year they cease to be married to, or in a civil partnership with, the relevant person.
• The same relief extends to situations where the settlor's only interest arises through two or more such family members, provided every one of those individuals dies during the year.
• Paragraphs 5A and 5B, which previously provided further exceptions relating to non-UK domiciled settlors, have been repealed by Finance Act 2025.