CG38719A | Charge on beneficiary of non-resident settlement – TCGA92/S87: Further Examples for 2018-19 and later years Table 1
From HM Revenue & Customs · Capital Gains Manual
Table 1 Onward payment rules of no application
Initial Allocation:
RB = Remittence Basis
| Capital payment to | Status of recipient | Capital payment for | Notes |
|---|---|---|---|
| Settlor | UK resident - RB does not apply | settlor | 2 |
| Settlor | UK resident - RB applies | settlor | 2 |
| Settlor | Not UK resident | settlor - but s87D(1) applies to disregard | 3 |
| Beneficiary | Close family member - UK resident -RB does not apply (settlor UK resident ) | settlor - s87G(2) applies | 1, 2 |
| Beneficiary | Close family member - UK resident -RB applies (settlor UK resident ) | settlor - s87G(2) applies | 1, 2 |
| Beneficiary | Close family member - UK resident - RB does not apply (settlor not UK resident) | beneficiary | 2 |
| Beneficiary | Close family member - UK resident - RB applies (settlor not UK resident) | beneficiary | 2 |
| Beneficiary | Close family member - not UK resident (settlor UK resident) | settlor - s87D(1) is disapplied by (3) and s87G(2) now applies | 1, 2 |
| Beneficiary | Close family member - not UK resident - (settlor not UK resident) | beneficiary - but s87D(1) applies to disregard | 3 |
| Beneficiary | Other beneficiary - UK resident - RB does not apply | beneficiary | 2 |
| Beneficiary | Other beneficiary - UK resident - RB applies | beneficiary | 2 |
| Beneficiary | Other beneficiary - not UK resident | beneficiary - but s87D(1) applies to disregard | 3 |
General notes
A. Any unmatched capital payments from the years to 5/4/18 are within the scope of the disregards in s87D (subject to s87E)
B. Special rules in s87F may apply if the settlement ceases to exist in the year
C. Close family member defined in s87H
D. The residence or RB status of a close family member does not impact the treatment of a capital payment for the settlor
E. For split years any gains are treated as arising in the UK part of that year - s87(2A)
Referenced notes
1. Settlor has power of recovery from CFM beneficiary for any tax charged s87G(3).
2. If the individual to whom the capital payment is allocated becomes non resident then under s87N no account will be taken of any unmatched part of the capital payment unless person is within scope of the temporary no resident provisions in which case s87P will apply
3. If the individual is only temporarily non-resident s87P will bring the payment back into account in the period of return.