Finance Act 1981

83 Provisions supplementary to sections 80 to 82. U.K.

(1) In sections 80 to [F1 82A] above “capital payment” means any payment which is not chargeable to income tax on the [F2 recipient] or, in the case of a [F2 recipient] who is neither resident nor ordinarily resident in the United Kingdom, any payment received otherwise than as income.

[F3 (1A) But in sections 80 to 82A above “capital payment” does not include a payment under a transaction entered into at arm’s length.]

(2) In [F4 subsections (1) and (1A)]above references to a payment include references to the transfer of an asset and the conferring of any other benefit, and to any occasion on which settled property becomes property to which section 46 of the M1 Capital Gains Tax Act 1979 applies.

(3) The fact that the whole or part of a benefit is by virtue of [F5 section 740(2)(b) of the Taxes Act] treated as the recipient’s income for a year of assessment after that in which it is received—

(a) shall not prevent the benefit or that part of it being treated for the purposes of sections 80 to [F6 82A] above as a capital payment in relation to any year of assessment earlier than that in which it is treated as his income; but

(b) shall preclude its being treated for those purposes as a capital payment in relation to that or any later year of assessment.

(4) For the purposes of sections 80 to [F6 82A] above the amount of a capital payment made by way of loan, and of any other capital payment which is not an outright payment of money, shall be taken to be equal to the value of the benefit conferred by it.

(5) For the purposes of sections 80 to 82 above a capital payment shall be regarded as received by a beneficiary from the trustees of a settlement if—

(a) he receives it from them directly or indirectly, or

(b) it is directly or indirectly applied by them in payment of any debt of his or is otherwise paid or applied for his benefit, or

(c) it is received by a third person at the beneficiary’s direction.

(6) Section 29(3) of the M2 Capital Gains Tax Act 1979 (losses accruing to non-residents not to be allowable losses) shall not prevent losses accruing to trustees in a year of assessment for which section 80 above or section 17 of that Act applied to the settlement from being allowed as a deduction from chargeable gains accruing in any later year beginning after 5th April 1981 (so far as they have not previously been set against gains for the purposes of a computation under either of those sections or otherwise).

[F7 (7) In sections 80 to [F6 82A] above and in the preceding provisions of this section—

• “settlement” and “settlor” have the meaning given by section [F8 681(4)] of the Taxes Act and “settlor” includes, in the case of a settlement arising under a will or intestacy, the testator or intestate; and

• “settled property” shall be construed accordingly.]

[F9 (8) In a case where—

(a) at any time on or after 19th March 1991 a capital payment is received from the trustees of a settlement or is treated as so received by virtue of section 82A(1) above,

(b) it is received by a person, or treated as received by a person by virtue of section 82A(2) to (6) above,

(c) at the time it is received or treated as received, the person is not (apart from this subsection) a beneficiary of the settlement, and

(d) subsection (9) or (10) below does not prevent this subsection applying,

for the purposes of sections 80 to 82 above the person shall be treated as a beneficiary of the settlement as regards events occurring at or after that time.

(9) Subsection (8) above shall not apply where a payment mentioned in paragraph (a) is made in circumstances where it is treated (otherwise than by subsection (8) above) as received by a beneficiary.

(10) Subsection (8) above shall not apply so as to treat—

(a) the trustees of the settlement referred to in that subsection, or

(b) the trustees of any other settlement,

as beneficiaries of the settlement referred to in that subsection.

(11) In subsection (8) above “capital payment” has the same meaning as in sections 80 to 82A above.]

Textual Amendments

F1 Word in s. 83(1) substituted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18,para. 6(2)(a)(6)

F2 Word in s. 83(1) substituted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18 para. 6(2)(b)(6)

F3 S. 83(1A) inserted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18 para. 6(3)(6)

F4 Words in s. 83(2) substituted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch. 18 para. 6(4)(6)

F5 Words substituted by Finance Act 1990 (c. 29), s. 89, Sch. 14 para. 18 (correction of errors)—treated as if made by Income and Corporation Tax Act 1988. Previously “section 45(2)(b) above”.

F6 Word in s. 83(3)(a)(4)(7) substituted by Finance Act 1991 (c.31, SIF 63:2), s. 91, Sch.18, para. 6(5)(6)

F7 S. 83(7) added by Finance Act 1984 (c. 43), s. 71

F8 Words substituted by Income and Corporation Taxes Act 1988, Sch. 29 para. 32

F9 S. 83(8)-(11) inserted by Finance Act 1991 (c. 31, SIF 63:2), s. 91, Sch.18, para.5.

Modifications etc. (not altering text)

C1 See Finance Act 1984 (c. 43), s. 70(1), Sch. 14 para. 1(2)—subject to 1984 s. 70(4), s. 83 to apply for the purposes of 1984 Sch. 14 as it does for 1981 ss. 80 to 82.

Marginal Citations

M1 1979 c. 14.

M2 1979 c. 14.