Taxation of Chargeable Gains Act 1992 Schedule 4C paragraph 6

Gains attributed to settlor

Schedule 4C paragraph 6 provides for the reduction of the chargeable amount on a transfer of value where gains from that transfer have already been charged on the settlor, thereby preventing a double charge on the same gains.

• Where gains arising from a transfer of value have been attributed to the settlor under the rules for non-resident or dual-resident settlements (section 86), the chargeable amount for Schedule 4C purposes is reduced by those attributed gains.
• Similarly, where the settlor was temporarily non-resident and gains are treated as accruing to them on their return to the UK under the temporary non-residence rules (section 1M, as modified by paragraph 12), the chargeable amount is also reduced by those gains.
• When calculating the gains attributed to the settlor for the purpose of this reduction, any capital losses that did not arise under the Schedule 4B anti-avoidance rules must be ignored — meaning losses from other sources cannot reduce the amount of the offset.
• The overall effect is to ensure that gains are not taxed twice — once on the settlor personally and again under the Schedule 4C transfer of value provisions — while restricting the use of unrelated losses to artificially reduce the relief.