Taxation of Chargeable Gains Act 1992

[F1 87K Attribution of gains or payments to recipient of onward gift U.K.

(1) Where this section applies (see section 87I), G is—

(a) the amount or value of so much of the onward payment as is within any of sub-paragraphs (i) to (iii) of section 87I(1)(d), or

(b) if lower, the amount of the original payment.

(For the meaning of R and U, see section 87J.)

(2) If R is greater than nil, sections 87 and 87A have effect for the gift year and later tax years—

(a) as if a capital payment was received from the trustees by the subsequent recipient—

(i) as a beneficiary of the settlement (whether or not the subsequent recipient is otherwise a beneficiary of the settlement), and

(ii) at the time the subsequent recipient received the onward payment,

(b) as if that capital payment consisted of—

(i) R, if G is greater than R, or

(ii) so much of R as is equal to G, if G is not greater than R, and

(c) as if so much of the original payment as is equal to that capital payment was not received by the otherwise-liable person.

(3) If G is greater than R, and if U is greater than nil—

(a) chargeable gains are treated as accruing to the subsequent recipient in the gift year (but see section 87L(3) and (4)),

(b) the amount of those gains is—

(i) U, if (G − R) is greater than U, or

(ii) so much of U as is equal to (G − R), if (G − R) is not greater than U, and

(c) the chargeable gains treated by section 87 as accruing to the otherwise-liable person by reason of the original payment are treated as from the end of the gift year as reduced by that amount, with that reduction being made from so much of those gains as has not by then been remitted to the United Kingdom in a tax year in which the otherwise-liable person is resident in the United Kingdom.

(4) If this section applies by reference to the original payment also in relation to a gift received from the original beneficiary in a tax year earlier than the gift year, this section applies in relation to the onward payment as if—

(a) the amount given by section 87J for R were reduced by the amount of any capital payment given by subsection (2) in relation to that earlier year, and

(b) the amount given by section 87J for U were reduced by the amount of any gains given by subsection (3) in relation to that earlier year.]

Textual Amendments

F1 Ss. 87D-87P inserted (with effect in accordance with Sch. 10 para. 1(12)-(15) of the amending Act) by Finance Act 2018 (c. 3), Sch. 10 para. 1(1)