Offshore trusts—matching capital payments where the trustee borrowing rules apply—Sch 4C TCGA 1992
Offshore trusts—matching capital payments where the trustee borrowing rules apply—Sch 4C TCGA 1992

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Offshore trusts—matching capital payments where the trustee borrowing rules apply—Sch 4C TCGA 1992
  • When is Sch 4C in point?
  • What do Sch 4C pools contain?
  • Outstanding s 1(3) amounts
  • Payments made to non-residents
  • Sch 4B gains
  • Priority of OIG amounts
  • Matching of capital payments under Sch 4C
  • Example: allocating capital payments against gains in post 5 April 2008 Sch 4C pools before 6 April 2018
  • Charge on beneficiary of non-resident settlement for 2018-19 and later years
  • More...

When is Sch 4C in point?

A Sch 4C pool, ie a pool of gains to which Schedule 4C to the Taxation of Chargeable Gains Act 1992 (TCGA 1992) applies, is created when the trustees of a settlement make a transfer of value to which TCGA 1992, Sch 4B applies (Sch 4B transfer). The Sch 4B (or 'trustee borrowing') rules are discussed in the Offshore trusts—the trustee borrowing rules—Sch 4B and Sch 4C TCGA 1992 Practice Note.

It is important to note that a Sch 4C pool is created even if no gain results from the transfer or if any such gain is attributed to the settlor on an arising basis under TCGA 1992, s 86.

Note that, in the event that Sch 4B applies, the Sch 4C matching rules apply rather than those in TCGA 1992, s 87.

What do Sch 4C pools contain?

When a Sch 4C pool has been created, it contains:

  1. any outstanding TCGA 1992, s 1(3) (formerly s 2(2)) amounts in the settlement

  2. any TCGA 1992, s 1(3) amounts that have been matched to payments to non-residents for the current and prior years, and

  3. any TCGA 1992, Sch 4B gains

Outstanding s 1(3) amounts

The outstanding s 1(3) amount of any given year is the s 1(3) amount of that year less any capital payment which has been matched with it under s 87A rules in

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