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What is a capital payment?

For each beneficiary (see I5.1240) it is necessary to calculate the capital payments he receives:

1. Ìý

   •ÌýÌýÌýÌý from the trustees in the tax year concerned¹

2. Ìý

   •ÌýÌýÌýÌý from the trustees in previous years, so far as not matched with a capital payment²

3. Ìý

   •ÌýÌýÌýÌý from the trustees following a transfer from another settlement that may or may not have involved trustee borrowing³ (see below, I5.1256 and I5.1257)

4. Ìý

   •ÌýÌýÌýÌý from a qualifying company controlled by the trustees⁴ (see below)

A capital payment is any payment other than a payment that is⁵:

1. Ìý

   •ÌýÌýÌýÌý chargeable to income tax, where received by a UK resident

2. Ìý

   •ÌýÌýÌýÌý received as income, where received by a person who is not resident (and, before 2013/14, not ordinarily resident) in the UK

3. Ìý

   •ÌýÌýÌýÌý made on a commercial basis, ie made at arm's length

This means that if the payment is within the transfer of assets abroad rules (see