Textual Amendments
F1Word in Pt. 3 heading inserted (with effect in accordance with Sch. 22 para. 12 of the amending Act) by Finance Act 2009 (c. 10), Sch. 22 para. 9; S.I. 2010/670, art. 2
(1)Subsection (3) applies if—
(a)chargeable gains of an amount equal to the amount referred to in section 86(1)(e) for a tax year (“year A”) are treated under [F4section 1M(3)] as accruing to a settlor under section 86 in the period of return,
(b)there are amounts on which[F5, in the case of the settlement, individuals] are charged to tax under section 87[F6, 87K, 87L] or 89(2) for one or more tax years, each of which is earlier than the year of return, and
(c)those amounts are in respect of matched capital payments received F7... .
(2)A “matched” capital payment is a capital payment, all or part of which is matched under section 87A with [F8the section 1(3) amount] for year A.
(3)The amount of the chargeable gains mentioned in subsection (1)(a) for year A that are treated under [F9section 1M(3)] as accruing to the settlor under section 86 in the period of return is to be reduced by the appropriate amount.
(4)The appropriate amount is—
(a)the sum of the amounts mentioned in subsection (1)(c) to the extent that the matched capital payments are matched under section 87A with [F10the section 1(3) amount] for year A, or
(b)if the property comprised in the settlement has at any time included property not originating from the settlor, so much (if any) of that sum as, on a just and reasonable apportionment, is properly referable to the settlor.
(5)If a reduction falls to be made under subsection (3) for the year of return, the deduction to be made in accordance with section 87(4)(b) for the settlement for that year must not be made until—
(a)all the reductions to be made under subsection (3) for that year for each settlor have been made, and
(b)those reductions are to be made starting with the year immediately preceding the year of return and working backwards.
(6)Subsection (7) applies if, with respect to year A, an amount remains to be treated under [F11section 1M(3)] as accruing to any of the settlors in the period of return after having made the reductions under subsection (3) with respect to year A.
(7)The aggregate of the amounts remaining to be so treated (for all of the settlors) is to be applied in reducing so much of [F12the section 1(3) amount] for year A as has not already been matched with a capital payment under section 87A for any year prior to the year of return (but not so as to reduce [F12the section 1(3) amount] below zero).
(8)In this section—
(a)“the settlement” means the settlement in relation to which the settlor mentioned in subsection (1)(a) is a settlor,
(b)a reference to “the settlors” or “each settlor” is to the settlors or each settlor in relation to the settlement,
(c)“period of return” and “year of return” have the same meanings as in [F13section 1M(3)], and
(d)paragraph 8 of Schedule 5 applies in construing the reference to property originating from the settlor.]
Textual Amendments
F2Words in s. 86A heading substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(9)
F3S. 86A substituted (with effect in accordance with Sch. 45 para. 153(3) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 120
F4Words in s. 86A(1)(a) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(2)
F5Words in s. 86A(1)(b) substituted (15.3.2018) by Finance Act 2018 (c. 3), Sch. 10 para. 1(3)(a)(i)
F6Words in s. 86A(1)(b) inserted (15.3.2018) by Finance Act 2018 (c. 3), Sch. 10 para. 1(3)(a)(ii)
F7Words in s. 86A(1)(c) omitted (15.3.2018) by virtue of Finance Act 2018 (c. 3), Sch. 10 para. 1(3)(b)
F8Words in s. 86A(2) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(3)
F9Words in s. 86A(3) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(4)
F10Words in s. 86A(4)(a) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(5)
F11Words in s. 86A(6) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(6)
F12Words in s. 86A(7) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(7)
F13Words in s. 86A(8)(c) substituted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 34(8)