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Home / Simons-Taxes /IHT, trusts and estates /Part I5 Settled property /Division I5.12 Income tax and CGT for non-resident settlements /Liability of beneficiaries—capital gains tax / I5.1245 Matching of settlement gains with capital payments
Commentary

I5.1245 Matching of settlement gains with capital payments


IHT, trusts and estates

Steps for matching settlement gains with capital payments

The steps for matching section 1(3) amounts with capital payments to beneficiaries, settlors and recipients of onward gifts (see I5.1244) are as follows1.

  1. Ìý

    (1)ÌýÌýÌýÌý Calculate the trustees' section 1(3) amount for the tax year

  2. Ìý

    (2)ÌýÌýÌýÌý Calculate the total capital payments to beneficiaries for that year, using the valuation rules (see I5.1242) where relevant

  3. Ìý

    (3)ÌýÌýÌýÌý If the amount in (1) exceeds the amount in (2), the section 1(3) amount for the year is matched with all the capital payments. The section 1(3) amount for the year is reduced by the amount of the capital payments, and the amount of the capital payments is reduced to nil. The amounts of the capital payments are treated as the beneficiaries' chargeable gains

  4. Ìý

    Any remaining section 1(3) amount for the

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