Taxation of Chargeable Gains Act 1992 section 86A

Attribution of gains to settlor where temporarily non-resident

Section 86A prevents double taxation where a settlor of a non-resident trust returns to the UK after a period of temporary non-residence, by reducing the gains attributed to the settlor to the extent those gains have already been taxed on beneficiaries.

• Where a settlor returns to the UK and trust gains from the absence period are attributed to them, any gains already taxed on beneficiaries through matched capital payments are deducted from the settlor's charge
• The reduction equals the total of amounts already taxed on beneficiaries, but where the trust contains property not originating from the settlor, only a just and reasonable proportion referable to that settlor is deducted
• Reductions are applied working backwards from the year immediately before the year of return, and must be completed before any further adjustments are made to the trust's available gains for matching purposes
• Any remaining gains attributed to all settlors after the reduction are used to reduce the trust's unmatched gains pool for the relevant year, but cannot reduce that pool below zero