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HMRC internal manual

Capital Gains Manual

Outstanding section 2(2) amounts


The outstanding section 2(2) amount as at the end of the year of transfer is calculated as follows:

  • Calculate the section 2(2) amount for the year of transfer.
  • Give effect to the application of TCGA92/S90 (transfers between settlements), CG38910+, to the year of transfer or any earlier year. This applies to transfers from and to the settlement.
  • Apply the ordinary matching rules in TCGA92/S87 to any capital payments made in the year of transfer or any earlier year to identify any unmatched amounts.
  • For the year of transfer only, add back any matched capital payment that is received by a non-UK resident beneficiary who will not be chargeable on the gain.