Finance Act 1981

80 Gains of non-resident settlements. U.K.

(1) This section applies to a settlement for any year of assessment (beginning on or after 6th April 1981) during which the trustees are at no time resident or ordinarily resident in the United Kingdom if the settlor or one of the settlors is at any time during that year, or was when he made his settlement, domiciled and either resident or ordinarily resident in the United Kingdom.

(2) There shall be computed in respect of every year of assessment for which this section applies the amount on which the trustees would have been chargeable to tax under section 4(1) of the M1 Capital Gains Tax Act 1979 if they had been resident or ordinarily resident in the United Kingdom in the year; and that amount, together with the corresponding amount in respect of any earlier such year so far as not already treated under subsection (3) or section 81(2) below as chargeable gains accruing to beneficiaries under the settlement, is in this section and sections 81 and 82 below referred to as the trust gains for the year.

[F1 (2A) Where as regards the same settlement and for the same year of assessment—

(a) chargeable gains, whether of one amount or of two or more amounts, are treated as accruing by virtue of paragraph 2 of Schedule 16 to the Finance Act 1991 (gains of non-resident settlements chargeable on settlor), and

(b) an amount falls to be computed under subsection (2) above,

the amount so computed shall be treated as reduced by the amount, or aggregate of the amounts, mentioned in paragraph (a) above.]

(3) Subject to the following provisions of this section, the trust gains for a year of assessment shall be treated as chargeable gains accruing in that year to beneficiaries of the settlement who receive capital payments from the trustees in that year or have received such payments in any earlier year.

(4) The attribution of chargeable gains to beneficiaries under subsection (3) above shall be made in proportion to, but shall not exceed, the amounts of the capital payments received by them.

(5) A capital payment shall be left out of account for the purposes of subsections (3) and (4) above to the extent that chargeable gains have by reason of the payment been treated as accruing to the recipient in an earlier year.

(6) A beneficiary shall not be charged to tax on chargeable gains treated by virtue of subsection (3) above as accruing to him in any year unless he is domiciled in the United Kingdom at some time in that year.

[F2 (6A) In computing an amount under subsection (2) above in respect of the year 1991-92 or a subsequent year of assessment, the effect of Schedule 10 to the Finance Act 1988 (settlor chargeable instead of trustees in certain circumstances) shall be ignored.]

(7) For the purposes of this section a settlement arising under a will or intestacy shall be treated as made by the testator or intestate at the time of his death.

(8) Section 17 of the Capital Gains Tax Act 1979 shall not apply as respects chargeable gains accruing to the trustees of a settlement after 5th April 1981; and the references in subsections (3) and (4) above to capital payments received by beneficiaries do not include references to any payment received before 10th March 1981, or any payment received on or after that date [F3 and before the 6th April 1984] so far as it represents a chargeable gain which accrued to the trustees before 6th April 1981.

Textual Amendments

F1 S. 80(2A) inserted by Finance Act 1991 (c. 31, SIF 63:2), s. 89(2).

F2 S. 80(6A) inserted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18, para.1.

F3 Words inserted by Finance Act 1984 (c. 43), s. 70(3)

Modifications etc. (not altering text)

C1 S. 80: definition of "capital payment" applied by Finance Act 1991 (c. 31, SIF 63:2), s. 90, Sch. 17 para. 1(c).

C2 See Income and Corporation Taxes 1988 (c. 1, SIF 63:1), s. 762—ss. 80 to 84 to have effect for offshore income gains subject to 1988 s. 762(4) and to the modifications contained in 1988 s. 762.

C3 See Finance Act 1984 (c. 43), s. 70, Sch. 14 paras. 7(5), 8(3)(4), 12(2)—capital payments to be left out of account for the purposes of s. 80(3)(4) where postponement of capital gains tax under 1984 Sch. 14

Marginal Citations

M1 1979 c. 14.