Taxation of Chargeable Gains Act 1992 section 91

Increase in tax payable under section 87 or 89(2)

Section 91 deals with the supplementary tax charge that applies when capital payments from non-resident trusts are made to beneficiaries more than one year after the trust gains to which they are matched originally arose.

• Where a capital payment from a non-resident trust is matched to trust gains from an earlier tax year, and the payment is made more than one year after that earlier year, an additional tax charge applies as a deterrent to trustees delaying distributions.
• The additional charge is calculated at 10% per annum of the CGT that would otherwise be due, applied for each year of delay, subject to a maximum chargeable period of six years — meaning the supplement cannot exceed 60% of the base tax.
• The total tax (including the supplement) cannot exceed the amount of the capital payment itself, and the beneficiary's annual exempt amount is set against these trust gains first, reducing the amount subject to the supplementary charge.
• The Treasury has the power to change the 10% rate by order, and any such change can apply to interest already running for existing chargeable periods as well as to future ones.