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HMRC internal manual

Capital Gains Manual

Years before 2008-09 - outline

Before FA 2008-09 any trustees’ gains for a year that were unmatched in that year were carried forward and added to any gains for the next year. So in any one year there would be a single pool of gains for that year and not identifiable section 2(2) amounts for individual years. Because capital payments were matched against this single pool of gains it is not possible to identify which year’s gains the payment has been matched against.

The matching rules described in CG38690 and CG38725 also apply to capital payments and trustees’ gains for earlier years that were unmatched as at the beginning of 2008-09. This means it is necessary to identify in what year before 2008-09 there are unmatched trustees’ gains or unmatched capital payments.

If the beneficiary is non-UK domiciled they will not be taxable on any part of the s87 gain that accrues because trustees’ gains or capital payments are unmatched as at the beginning of 2008-09 are matched against payments or gains for later years, CG38760.