Taxation of Chargeable Gains Act 1992 section 87P

Sections 87 and 87A: temporary migration after payment disregarded

Section 87P deals with what happens when a beneficiary who received a capital payment from a non-UK resident trust, and whose payment was previously disregarded because they became non-UK resident, subsequently returns to the UK after only a temporary period abroad.

• Where a capital payment was previously disregarded under section 87N because the beneficiary moved abroad, section 87P can bring it back into charge if the beneficiary was only temporarily non-resident and returns to the UK.
• The payment is treated as if it were received by the individual during their period of return to the UK, so it can then be matched against the trust's gains under the normal rules in sections 87 and 87A.
• This treatment applies provided the payment has not already been matched against gains for an earlier tax year (from 2018–19 onwards) when the individual was UK resident, and has not been matched for any tax year before 2018–19.
• The definitions of "temporarily non-resident", "temporary period of non-residence", and "period of return" are set out in Part 4 of Schedule 45 to the Finance Act 2013, which contains the statutory residence test anti-avoidance rules.