Taxation of Chargeable Gains Act 1992 section 85A

Transfers of value: attribution of gains to beneficiaries

Section 85A establishes how gains arising from certain transfers of value by trustees are attributed to beneficiaries, and ensures that these gains are kept separate from the normal trust gains attribution rules.

• Where trustees make a transfer of value caught by the anti-avoidance rules in Schedule 4B, any resulting gains are attributed to beneficiaries under a separate regime set out in Schedule 4C.
• The normal rules for attributing trust gains to settlors and beneficiaries (sections 86A to 95) continue to apply but are subject to the overriding provisions of Schedule 4C.
• Gains and losses arising under Schedule 4B are excluded from the calculation of the settlement's section 1(3) amount for a tax year, and gains held in a Schedule 4C pool are similarly excluded from the normal attribution rules in sections 87 to 89, preventing double counting.
• Conversely, gains and losses that fall within the normal attribution rules under sections 87 to 89 are not taken into account when computing the gains or losses arising under Schedule 4B.