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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Paragraph 126 elections: time limit for making election

FA08/Sch7/para126(2)

The time limit for making the election is 31 January after the end of the first tax year in which either of the following two events occurs in 2008-09 or later, paragraph 126(2):

  • a capital payment is received by a UK-resident beneficiary or
  • there is a transfer of the settled property to which section 90 TCGA applies, CG38910+.

For example, if the trustees make a capital payment to a UK resident beneficiary in June 2013 they have until 31 January 2015 to make the election.

The time-limit starts even if first capital payment is received by a UK-resident beneficiary who is not entitled to the relief. For example, the first capital payment is received by a UK-resident and domiciled individual. The trustees don’t make the election because the beneficiary would get no relief. It may be too late to make the election if a capital payment is then received by a qualifying beneficiary.

An election may be made before a triggering event occurs.

There is no requirement that the beneficiary receiving the payment was a beneficiary as at 6 April 2008. They may become a beneficiary at some later time.

Any election made late will be considered in accordance with CG13800+.