SolvedCG38750 | Years before 2008-09 - unmatched capital payments - example 1
From HM Revenue & Customs · Capital Gains Manual
FA08/Sch07/para122(1)(2)
| Date | Description | Beneficiary | Amount |
|---|---|---|---|
| 2005-06 | Capital payments received | Beneficiary A | £15,000 |
| - | - | Beneficiary B | £12,000 |
| - | Trustees’ gains (section 2(2) amount) | - | £37,000 |
| 2007-08 | Capital payments received | Beneficiary A | £8,000 |
| - | - | Beneficiary B | £9,000 |
In 2005-06 the capital payments £15,000 and £12,000 are matched against £37,000 trustees’ gains and chargeable gains of £15,000 and £12,000 accrue to A and B. In 2008-09 and later years paragraph 122(1) of schedule 7 applies and the capital payments are reduced to nil. The unmatched trustees’ gains of £10,000 are carried forward under the old section 87(2) to later years.
In 2007-08 the £10,000 trustees’ gains carried forward from 2005-06 are matched against the £17,000 capital payments received. Gains of £4,705 (£10,000 x 8,000/17,000) accrue to A and gains of £5,295 (£10,000 x 9,000/17,000) accrue to B. Their respective unmatched capital payments are reduced to £3,295 (£8,000 - £4,705) and £3,705 (£9,000 - £5,295). Paragraph 122(2) of Schedule 7 ensures only those unmatched parts of the capital payments are carried forward for use in 2008-09 or later years.