Taxation of Chargeable Gains Act 1992 section 87N

Sections 87 and 87A: disregard of payments to migrating beneficiary

Section 87N provides that where a beneficiary (or settlor) receives a capital payment from a non-resident trust while UK resident but later becomes non-UK resident before the payment is fully matched to trust gains, the unmatched portion of that payment is excluded from the matching process for the years in which the relevant person is non-resident.

• Capital payments received by a beneficiary while UK resident are disregarded for matching purposes in any later tax year in which the relevant person (beneficiary or, where applicable, the settlor) is non-UK resident.
• The disregard applies only to the extent that the capital payment has not already been matched to trust gains in an earlier tax year when the relevant person was UK resident.
• The "relevant person" is normally the beneficiary, but where the settlor is liable for the tax because the beneficiary is a close family member of the settlor (under the close family member rules), the settlor is treated as the relevant person instead.
• The disregard is subject to an override for temporary non-residence: if the relevant person returns to the UK after a short period abroad, the previously disregarded payment may be brought back into the matching process.

---