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HMRC internal manual

Capital Gains Manual

Charge on beneficiary of non-resident settlement – TCGA92/S87: Further Examples for 2018-19 and later years Table 1

Table 1 Onward payment rules of no application

 

Initial Allocation:

RB = Remittence Basis

Capital payment to  Status of recipient Capital payment for Notes
       
       
Settlor UK resident - RB does not apply settlor 2
       
Settlor UK resident - RB applies settlor 2
       
Settlor Not UK resident settlor - but s87D(1) applies to disregard  3
       
       
       
Beneficiary Close family member  - UK resident -RB does not apply (settlor UK resident ) settlor - s87G(2) applies  1, 2
       
Beneficiary Close family member  - UK resident -RB applies (settlor UK resident ) settlor - s87G(2) applies  1, 2
       
       
Beneficiary Close family member  - UK resident - RB does not apply (settlor not UK resident) beneficiary 2
       
Beneficiary Close family member  - UK resident - RB applies (settlor not UK resident) beneficiary 2
       
       
Beneficiary Close family member - not UK resident (settlor UK resident) settlor - s87D(1) is disapplied by (3) and s87G(2) now applies 1, 2
       
Beneficiary Close family member - not UK resident - (settlor not UK resident) beneficiary - but s87D(1) applies to disregard  3
       
       
Beneficiary Other beneficiary - UK resident - RB does not apply beneficiary  2
       
Beneficiary Other beneficiary - UK resident - RB applies beneficiary  2
       
       
Beneficiary Other beneficiary - not UK resident beneficiary - but s87D(1) applies to disregard  3

 General notes

A. Any unmatched capital payments from the years to 5/4/18 are within the scope of the disregards in s87D (subject to s87E)

B. Special rules in s87F may apply if the settlement ceases to exist in the year

C. Close family member defined in s87H

D. The  residence or RB status of a close family member does not impact the treatment of a capital payment for the settlor

E. For split years any gains are treated as arising in the UK part of that year - s87(2A)

 

Referenced notes

  1. Settlor has power of recovery from CFM beneficiary for any tax charged s87G(3).

  2. If the individual to whom the capital payment is allocated becomes non resident then under s87N no account will be taken of any unmatched part of the capital payment unless person is within scope of the temporary no resident provisions in which case s87P will apply

  3. If the individual is only temporarily non-resident s87P will bring the payment back into account in the period of return.