Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
, see all updates

Years before 2008-09 - unmatched capital payments - example 1

FA08/Sch07/para122(1)(2)

2005-06 Capital payments received Beneficiary A £15,000
       
    Beneficiary B £12,000
  Trustees’ gains (section 2(2) amount)   £37,000
2007-08 Capital payments received Beneficiary A £8,000

In 2005-06 the capital payments £15,000 and £12,000 are matched against £37,000 trustees’ gains and chargeable gains of £15,000 and £12,000 accrue to A and B. In 2008-09 and later years paragraph 122(1) of schedule 7 applies and the capital payments are reduced to nil. The unmatched trustees’ gains of £10,000 are carried forward under the old section 87(2) to later years.

In 2007-08 the £10,000 trustees’ gains carried forward from 2005-06 are matched against the £17,000 capital payments received. Gains of £4,705 (£10,000 x 8,000/17,000) accrue to A and gains of £5,295 (£10,000 x 9,000/17,000) accrue to B. Their respective unmatched capital payments are reduced to £3,295 (£8,000 - £4,705) and £3,705 (£9,000 - £5,295). Paragraph 122(2) of Schedule 7 ensures only those unmatched parts of the capital payments are carried forward for use in 2008-09 or later years.