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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Capital payment by close company controlled by trustees - TCGA92/S87


If a capital payment is received from a close company or a non-resident close company controlled by the trustees it is treated as if it were received from the trustees. This prevents the trustees avoiding the application of TCGA/S87 by routing the payment through a company they control allowing the beneficiary to argue that the payment is not received from the trustees.

The normal definitions of close company and control apply subject to the modifications in TCGA92/S96(10). Close company is a term that applies only to UK resident companies. For the sake of convenience the guidance on TCGA/S87 uses the term non-resident close company to mean a company that would be close if was resident in the UK.

See CG38690 for guidance on the meaning of control.