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HMRC internal manual

Capital Gains Manual

Arrival in and departure from UK: temporary non-residence: attribution of gains to settlor - year of departure 2013-14 or later

TCGA92/S86 provides that in certain cases a UK resident settlor of a non-resident settlement is assessed on the chargeable gains of the trustees, see CG38400+. Following the enactment of TCGA92/S10A a settlor who is temporarily resident outside the UK may also be assessed under Section 86 on gains realised by the trustees during his/her period of temporary non-residence.

However, all or part of the gains realised by the trustees during the settlor’s period of temporary non-residence may already have been charged, under TCGA92/S87, to beneficiaries of the settlement who have received capital payments, see CG38570c. TCGA92/S86A provides relief in this situation by excluding the gains charged to beneficiaries under Section 87 from the extended charge on the settlor under Section 86.

Any case involving Section 86 or Section 86A should be reported to Specialist PT Trusts and Estates in accordance with CG38400+.