Taxation of Chargeable Gains Act 1992 Schedule D1 paragraph 3

Relief in respect of deemed gains under section 86

Schedule D1 paragraph 3 provides relief for UK-resident settlors who are taxed on gains of non-resident settlements, where those gains include qualifying foreign gains that are the subject of a foreign gain claim.

• Where gains of a non-resident settlement would normally be attributed to the settlor under section 86, relief is available if a qualifying foreign gain arose to the trustees in the same tax year.
• The settlor must identify the qualifying foreign gain and make a foreign gain claim for the relevant tax year.
• Once a valid claim is made, the qualifying foreign gain is removed from the section 86 calculation, reducing the amount attributed to the settlor.
• Any qualifying foreign losses of the trustees in the same tax year are also excluded from the section 86 calculation, both for that year and for all subsequent years.