Taxation of Chargeable Gains Act 1992 section 87A

Section 87: matching

Section 87A sets out the step-by-step process for matching capital payments made by non-resident trustees to beneficiaries against the trust's chargeable gains (known as section 1(3) amounts), supplementing the attribution rules in section 87.

• Capital payments received by all beneficiaries in a tax year are totalled and matched first against the trust's chargeable gains for the same year, then against gains of earlier years (latest year first), with any unmatched payments carried forward to be set against gains of later years.
• Where total capital payments exceed the trust's chargeable gains for a year, each beneficiary's payment is scaled down by a relevant proportion — being the trust's gains divided by the total capital payments — so that gains are shared fairly among beneficiaries.
• The matching process is iterative: after each matching round, the gains and capital payments are reduced by the amounts already matched, and the process repeats working backwards through earlier years until either all gains or all capital payments have been fully matched.
• All reductions from the matching process are cumulative and must be carried forward into any future application of the matching rules, ensuring that amounts already matched are not used again.