Paragraph 5 Capital payments made by settlement: Schedule 4C cases

United Kingdom

(1)

This paragraph applies for the tax year 2025-26, 2026-27 or 2027-28 in relation to an individual if—

(a)

chargeable gains are treated as accruing to the individual in that tax year as a result of paragraph 8(1) of Schedule 4C to TCGA 1992 in relation to a capital payment from the trustees of a relevant settlement for which the individual is a beneficiary, and

(b)

the section 1(3) amount in the Schedule 4C pool is greater than nil for one or more tax years before 2025-26.

(2)

So much of the payment as is matched with section 1(3) amounts in the Schedule 4C pool for tax years before 2025-26 is qualifying overseas capital.

(3)

For the purposes of matching those amounts, apply section 87A of TCGA 1992 as if—

(a)

the section 1(3) amount in the Schedule 4C pool for each tax year after the tax year 2024-25 were nil, and

(b)

the reference in Step 2 in subsection (2) of section 87A of that Act to the total amount of capital payments received by the beneficiaries were to the total amount of capital payments—

(i)

received by the individual and other beneficiaries that are qualifying individuals for the relevant tax year, and

(ii)

to which paragraph 8(1) of Schedule 4C to that Act applies in relation to section 1(3) amounts in the Schedule 4C pool.

(4)

For the purposes of this paragraph, ignore any reduction of a section 1(3) amount in the Schedule 4C pool for the tax year 2024-25 or an earlier tax year resulting from the application of paragraph 8(1) of Schedule 4C to TCGA 1992 in the tax year 2025-26 or any subsequent tax year.

(5)

Sub-paragraph (6) applies where—

(a)

an amount of a capital payment has been matched with a section 1(3) amount in the Schedule 4C pool under sub-paragraph (2), and

(b)

that amount is designated as designated qualifying overseas capital.

(6)

The section 1(3) amount in the Schedule 4C pool is to be taken to have been reduced (but not below nil) by so much of it as matches with the capital payment for the purposes of any subsequent application of this paragraph.

(7)

This paragraph is not to be taken as affecting the application of section 87A of TCGA 1992 for any purpose other than for the purposes of this paragraph and F1paragraph 3 (and no section 1(3) amount in the Schedule 4C pool or capital payments are to be taken to have been reduced as a result of the application of this paragraph for any other purpose).

(8)

For the purposes of this paragraph—

(a)

“section 1(3) amount in the Schedule 4C pool” and “relevant settlement” are to be construed in accordance with Schedule 4C to TCGA 1992, and

(b)

section 97 of TCGA 1992 (supplementary provisions) applies as it applies for the purposes of sections 86A to 96 of that Act.

Annotations

Textual amendments

F1: Words in Sch. 10 para. 5(7) substituted (retrospective and with effect in accordance with s. 52(4)(b) of the amending Act) by Finance Act 2026 (c. 11), s. 52(2)(d)(iv)(4)(a)