Taxation of Chargeable Gains Act 1992 section 87C

Sections 87 and 87A: disregard of certain capital payments

Section 87C provides that certain capital payments made by non-resident settlement trustees to non-UK resident close-type companies are excluded from the rules that attribute trust gains to beneficiaries.

• Capital payments received from settlement trustees by a non-UK resident company that would qualify as a close company if UK resident are disregarded for the purposes of attributing trust gains to beneficiaries under sections 87 and 87A.
• The disregard applies to the whole or any part of a capital payment that meets the qualifying conditions in the relevant tax year.
• The exclusion does not apply where the capital payment is treated under section 96(3) to (5) as having been received by another person — in that case, the payment remains within the attribution rules.
• The effect is to prevent double counting: where a payment to a non-resident close-type company is redirected to an individual under section 96, it is taxed in that individual's hands rather than being matched separately at the trust level.