Taxation of Chargeable Gains Act 1992 Schedule 4B paragraph 3

Settlements within section 86 or 87

Schedule 4B paragraph 3 defines what it means for a settlement to be "within section 86" or "within section 87" in a given tax year, for the purposes of the Schedule 4B rules on gains arising from certain transactions involving non-resident or dual resident settlements.

• A settlement is "within section 86" in a tax year if, assuming chargeable gains arose from disposals of settled property originating from the settlor and all other relevant conditions were satisfied, those gains would be attributed to the settlor under section 86.
• A settlement is "within section 87" for a tax year if either section 87 applies to the settlement for that year, or gains would be treated as accruing to a beneficiary who received a capital payment from the trustees during that year under section 89(2).
• References to chargeable gains being treated as accruing in the context of the section 87 test also include offshore income gains treated as arising.
• These definitions are used throughout Schedule 4B to determine whether anti-avoidance provisions apply to gains realised through arrangements involving non-resident or dual resident settlements.