Taxation of Chargeable Gains Act 1992 Schedule D1 paragraph 4

Relief in respect of deemed gains under sections 87 and 89(2) and Schedule 4C

Schedule D1 paragraph 4 provides relief for beneficiaries of non-resident or migrant settlements who receive capital payments that would otherwise give rise to deemed chargeable gains under the trust attribution rules.

• Where a non-resident settlement falls within the trust gains attribution rules (sections 87, 89(2) or Schedule 4C), a beneficiary who receives a capital payment can include that payment in a foreign gain claim for the relevant tax year.
• If the beneficiary identifies the capital payment in a valid foreign gain claim, the payment is disregarded for the purposes of attributing trust gains to beneficiaries — both for that tax year and for all subsequent tax years.
• The disregard applies across the main attribution provisions: sections 87, 87A, 89(2) and paragraph 8 of Schedule 4C, so the capital payment will not trigger a deemed chargeable gain under any of these routes.
• The definitions of "capital payment", "settlement", "trustees" and "beneficiary" follow those used in section 97, and the rule treating payments to close family members of the settlor as received by the settlor (section 87G) also applies.

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