Commentary

I5.1245 Matching of settlement gains with capital payments

IHT, trusts and estates

I5.1245 Matching of settlement gains with capital payments

I5.1245 Matching of settlement gains with capital payments

Steps for matching settlement gains with capital payments

The steps for matching section 1(3) amounts with capital payments to beneficiaries, settlors and recipients of onward gifts (see I5.1244) are as follows1.

  1.  

    (1)     Calculate the trustees' section 1(3) amount for the tax year

  2.  

    (2)     Calculate the total capital payments to beneficiaries for that year, using the valuation rules (see I5.1242) where relevant

  3.  

    (3)     If the amount in (1) exceeds the amount in (2), the section 1(3) amount for the year is matched with all the capital payments. The section 1(3) amount for

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