Paragraph 126 elections: time limit for making election
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+.