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HMRC internal manual

Capital Gains Manual

TCGA92/Sch4B - transfers of value linked to trustee borrowing - outline

Conditions for TCGA92/Sch4B to apply

The basic conditions for TCGA92/Sch4B to apply are:

  • the trustees transfer value out of the settlement by transferring cash or assets for no consideration or by making a loan
  • at the time of the transfer the trustees have outstanding debt
  • the proceeds of the borrowing haven’t been used for normal trust purposes.

Despite the title of the Schedule it is not necessary to trace the source of transfer to the borrowing. The only test is that, at the time of the transfer, there is outstanding borrowing and the borrowed funds haven’t been used for normal trust purposes.

Applies to transfers of sterling

Sterling is an asset for the purposes of TCGA92/Sch4B, TCGA92/Sch4B/para13(1), so a transfer of value will include a transfer of cash.

Effect of TCGA92/Sch4B

If TCGA92/Sch4B applies the effect is:

  • the trustees are treated as disposing of and reacquiring at market value the assets left in the settlement
  • if the amount of the value transferred is lower than the value of the chargeable assets left in the trust only part of those assets are treated as being disposed of
  • the trustees cannot claim gifts holdover relief on the gain.


TCGA92/Sch4B only applies to transfers of value made on or after 21 March 2000.