[F187LCases where settlor liable following onward giftU.K.
(1)Subsection (2) applies where—
(a)ignoring this section and section 87M, a person is treated by section 87K(2) as receiving a capital payment from the trustees of a settlement at a time (“the time of receipt”) in a tax year,
(b)the settlor is resident in the United Kingdom at any time in that year, and
(c)the person mentioned in paragraph (a) is a close member of the settlor's family (see section 87H) at the time of receipt.
(2)Sections 87 and 87A have effect for that year, and later tax years, as if the capital payment—
(a)was received from the trustees by the settlor—
(i)as a beneficiary of the settlement (whether or not the settlor is otherwise a beneficiary of the settlement), and
(ii)at the time of receipt, and
(b)was not received by the person mentioned in subsection (1)(a).
(3)Subsection (4) applies where—
(a)in the case of a settlement, chargeable gains are (ignoring this section and section 87M) treated by section 87K(3) as accruing to a person in a tax year (“the subsequent recipient”),
(b)the settlor is resident in the United Kingdom at any time in that year, and
(c)the subsequent recipient is a close member of the settlor's family when the subsequent recipient receives the onward payment (see section 87I(1)(c)) by reference to which the chargeable gains are treated as accruing.
(4)Section 87K(3)(a) has effect as if its reference to the subsequent recipient were a reference to the settlor, and references (however expressed) to chargeable gains treated as accruing by this section are to chargeable gains treated by section 87K(3)(a) as accruing to the settlor as a result of the operation of this subsection.
(5)Where, in the case of a settlement, any tax is chargeable on the settlor as a result of this section and is paid, the settlor is entitled to recover the full amount of the tax from the person mentioned in subsection (1)(a) or (3)(a), as the case may be.
(6)For the purpose of recovering that amount, the settlor is entitled to require an officer of Revenue and Customs to give the settlor a certificate specifying—
(a)the amount of tax paid, and
(b)the amount of the gains on which the tax is paid,
and any such certificate is conclusive evidence of the facts stated in it.]
Textual Amendments
F1Ss. 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)