Paragraph 4 Relief in respect of deemed gains under sections 87 and 89(2) and Schedule 4CF1

(1)

This paragraph applies if—

(a)

a settlement is for a tax year—

(i)

one to which section 87 or 89(2) applies (attribution of gains to beneficiaries of settlements), or

(ii)

a relevant settlement in relation to a Schedule 4C pool, within the meaning of paragraph 8A of Schedule 4C (transfers of value: attribution of gains etc),

(b)

a beneficiary of the settlement receives a capital payment from the trustees in that tax year, and

(c)

the individual identifies the capital payment in a foreign gain claim for that tax year.

(2)

The capital payment is to be disregarded (in that tax year and in later tax years) for the purposes of sections 87, 87A and 89(2) and paragraph 8 of Schedule 4C.

(3)

The following apply for the purposes of this paragraph as they apply for the purposes of section 87—

(a)

section 87G (which provides for capital payments made to a close member of the settlor’s family to be treated in certain cases as received by the settlor);

(b)

section 97 (which makes provision about the construction of “capital payment”, “settlement”, “trustees” and “beneficiary”).

Annotations

Textual amendments

F1: Sch. D1 inserted (for the tax year 2025-26 and subsequent tax years) by Finance Act 2025 (c. 8), s. 39(2)(11)