Taxation of Chargeable Gains Act 1992 section 87F

Sections 87 and 87A: disregarded payments in year settlement ends

Section 87F addresses the treatment of capital payments made to a mix of UK-resident and non-resident beneficiaries in the tax year when a trust comes to an end.

• This section applies when a settlement ceases to exist in a tax year and two or more beneficiaries receive capital payments from the trustees, where at least one beneficiary is UK-resident and at least one is non-resident.
• A non-resident beneficiary is defined as one who is not resident in the United Kingdom at any time during the relevant tax year.
• Capital payments received by the non-resident beneficiaries in these circumstances are not excluded from the matching rules under section 87D(2), meaning they remain within the scope of the trust gains attribution process.
• The effect is to prevent non-resident beneficiaries from side-stepping the matching of trust gains to capital payments simply because the trust is winding up and distributions are being made to both resident and non-resident beneficiaries at the same time.