Taxation of Chargeable Gains Act 1992 Schedule 4C paragraph 9

Attribution of gains: disregard of certain capital payments

Section 9 of Schedule 4C sets out which capital payments made by trustees are to be ignored when matching Schedule 4C gains to beneficiaries, so that those payments do not trigger a tax charge on the beneficiary.

• Capital payments received before the tax year preceding the tax year in which the original transfer of value was made are excluded from the matching process entirely.
• Capital payments received from trustees who were UK-resident (and not Treaty non-resident) throughout the relevant tax year are also excluded, provided the payment was made before any transfer of value under Schedule 4B and was not made in anticipation of such a transfer or of chargeable gains arising under that Schedule.
• Capital payments received by a non-UK resident company that would be a close company if it were UK-resident are disregarded, except to the extent that the payment is treated as received by another person under the rules in section 96.
• These exclusions are narrow in practice: the main rule encountered is the timing exclusion for payments received too early relative to the original transfer of value, but the other categories exist to prevent unintended charges in specific circumstances.