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Schedule 28 | |
Section 158 | |
Capital gains tax: reporting limits and annual exempt amount | |
Part 1 | |
Reporting limits | |
1 After section 3 of the Taxation of Chargeable Gains Act 1992 (c. 12) insert— | 5 |
“3A Reporting limits | |
(1) Where in the case of an individual— | |
(a) the amount of chargeable gains accruing to him in any year | |
of assessment does not exceed the exempt amount for that | |
year, and | 10 |
(b) the aggregate amount or value of the consideration for all | |
chargeable disposals of assets made by him in that year does | |
not exceed four times the exempt amount for that year, | |
a statement to that effect is sufficient compliance with so much of any | |
notice under section 8 of the Management Act as requires | 15 |
information for the purposes of establishing the amount in which he | |
is chargeable to capital gains tax for that year. | |
(2) For the purposes of subsection (1)(a) above— | |
(a) the amount of chargeable gains accruing to an individual in a | |
year of assessment for which no deduction falls to be made in | 20 |
respect of allowable losses is the amount after any reduction | |
for taper relief; | |
(b) the amount of chargeable gains accruing to an individual in a | |
year of assessment for which such a deduction does fall to be | |
made is the amount before deduction of losses or any | 25 |
reduction for taper relief. | |
(3) For the purposes of subsection (1)(b) above a “chargeable disposal” | |
is any disposal other than— | |
(a) a disposal on which any gain accruing is not a chargeable | |
gain, or | 30 |
(b) a disposal the consideration for which is treated by virtue of | |
section 58 (husband and wife) as being such that neither a | |
gain nor a loss would accrue. | |
(4) Subsection (1) above applies to personal representatives (for the year | |
of assessment in which the individual in question dies and for the | 35 |
next 2 following years) as it applies to an individual. | |
(5) Subsection (1) above applies to the trustees of a settlement in | |
accordance with Schedule 1. | |
(6) In this section “exempt amount” has the meaning given by section 3 | |
(read, where appropriate, with Schedule 1).”. | 40 |
2 (1) In the heading to Schedule 1 to that Act (application of exempt amount in | |
cases involving settled property) after “exempt amount” insert “and | |
reporting limits”. | |
(2) In paragraph 1 of that Schedule (trustees for person with a disability) after | |
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sub-paragraph (5) insert— | |
“(5A) In its application to the trustees of a settlement, section 3A(1) has | |
effect with the substitution for the reference to section 8 of the | |
Management Act of a reference to section 8A of that Act.”. | |
(3) In paragraph 2 of that Schedule (other trustees) after sub-paragraph (6) | 5 |
insert— | |
“(6A) In its application to the trustees of a settlement, section 3A(1) has | |
effect with the substitution for the reference to section 8 of the | |
Management Act of a reference to section 8A of that Act.”. | |
Part 2 | 10 |
Annual exempt amount | |
3 (1) Section 3 of the Taxation of Chargeable Gains Act 1992 (c. 12) is amended as | |
follows. | |
(2) Omit subsection (6). | |
(3) In subsection (7) for “subsections (1) to (6)” substitute “subsections (1) to | 15 |
(5C)”. | |
(4) After that subsection insert— | |
“(7A) As they apply by virtue of subsection (7) above— | |
(a) subsection (5A) has effect with the omission of paragraph (b), | |
and | 20 |
(b) subsection (5B) has effect with the omission of the words “or | |
(b)”.”. | |
4 (1) Paragraph 1 of Schedule 1 to that Act is amended as follows. | |
(2) In sub-paragraph (1), in the words following paragraph (b)— | |
(a) for “section 3(1) to (6)” substitute “sections 3(1) to (5C) and 3A”; | 25 |
(b) at the end insert “, but with the modifications specified in this | |
paragraph”. | |
(3) After sub-paragraph (2) insert— | |
“(2A) As they apply by virtue of sub-paragraph (1) above— | |
(a) section 3(5A) has effect with the omission of paragraph (b), | 30 |
and | |
(b) section 3(5B) has effect with the omission of the words “or | |
(b)”.”. | |
(4) In sub-paragraph (3)— | |
(a) for “section 3” substitute “sections 3 and 3A(1)(a)”; | 35 |
(b) after “the exempt amount for the year”, where it first occurs, insert | |
“(except the one in section 3(2))”. | |
(5) In sub-paragraph (7) for “An inspector” substitute “An officer of the Board”. | |
5 (1) Paragraph 2 of that Schedule is amended as follows. | |
(2) In sub-paragraph (1) for “section 3(1) to (6)” substitute “sections 3(1) to (5C) | 40 |
and 3A”. | |
(3) In sub-paragraph (2)— | |
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(a) for “subsections (1) and (5)” substitute “section 3(1), (5A), (5B) and | |
(5C)”; | |
(b) after “section 3(1), (5A), (5B) and (5C)” insert “and section 3A(1)(a)”. | |
(4) After sub-paragraph (2) insert— | |
“(2A) As they apply by virtue of sub-paragraph (1) above— | 5 |
(a) section 3(5A) has effect with the omission of paragraph (b), | |
and | |
(b) section 3(5B) has effect with the omission of the words “or | |
(b)”.”. | |
(5) Omit sub-paragraph (3). | 10 |
(6) In sub-paragraph (9) for “An inspector” substitute “An officer of the Board”. | |
6 In the first column of the Table in section 98 of the Taxes Management Act | |
1970 (c. 9) (penalty for failure to furnish particulars etc), at the appropriate | |
place insert— | |
“Paragraph 1(7) of Schedule 1 to the 1992 Act.”. | 15 |
Part 3 | |
Commencement | |
7 The amendments in paragraphs 1, 2, 3(2) and (3), 4(2)(a) and (4)(a) and 5(2), | |
(3)(b) and (5) of this Schedule apply in relation to any notice under section 8 | |
or, as the case may be, section 8A of the Taxes Management Act 1970 given | 20 |
in relation to the year 2003-04 or any subsequent year of assessment. | |
8 The amendments in paragraphs 3(4), 4(2)(b), (3) and (4)(b) and 5(3)(a) and (4) | |
of this Schedule shall be deemed always to have had effect. | |
9 The amendments in paragraphs 4(5), 5(6) and 6 of this Schedule have effect | |
in relation to any notice given in respect of the year 2002-03 or any | 25 |
subsequent year of assessment, except that the amendment in paragraph 6 | |
has effect only in relation to such a notice given after the passing of this Act. | |
Schedule 29 | |
Section 162(2) | |
Transfers of value: attribution of gains to beneficiaries | |
Introduction | 30 |
1 Schedule 4C to the Taxation of Chargeable Gains Act 1992 (c. 12) (transfers | |
of value: attribution of gains to beneficiaries) is amended as follows. | |
Scope and scheme of Schedule | |
2 For paragraphs 1 and 2 (introduction and general scheme of Schedule) | |
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substitute— | |
“Introduction | |
1 (1) This Schedule applies where the trustees of a settlement (“the | |
transferor settlement”) make a transfer of value to which Schedule | |
4B applies (“the original transfer”). | 5 |
(2) Where this Schedule applies, the following gains— | |
(a) any Schedule 4B trust gains accruing by virtue of the | |
transfer (see paragraphs 3 to 7), and | |
(b) any outstanding section 87/89 gains of the transferor | |
settlement at the end of the year of assessment in which the | 10 |
transfer is made (see paragraph 7A), | |
are pooled for the purpose of attributing them, in accordance with | |
this Schedule, to beneficiaries who receive capital payments. | |
Paragraph 7B provides for further gains to be brought into the | |
pool in the case of a further transfer of value. | 15 |
(3) The gains mentioned in sub-paragraph (2) are referred to in this | |
Schedule as “Schedule 4C gains” and the pool is referred to as the | |
transferor settlement’s “Schedule 4C pool”. | |
(4) Paragraphs 8 to 9 provide for the attribution of gains in a | |
settlement’s Schedule 4C pool. | 20 |
(5) References in this Schedule to a transfer to which Schedule 4B | |
applies include any such transfer, whether or not any chargeable | |
gain or allowable loss accrues under that Schedule by virtue of the | |
transfer. | |
Other gains to be brought into Schedule 4C pool | 25 |
3 After paragraph 7 insert— | |
“Outstanding section 87/89 gains | |
7A (1) The amount of outstanding section 87/89 gains of a settlement at | |
the end of a year of assessment is given by—![equation: plus[char[G],minus[char[B]],times[char[N],char[C]]]](missing.gif) | |
where— | 30 |
G is the amount of the settlement’s section 87/89 gains for | |
the year (see sub-paragraphs (2) and (3)), | |
B is the amount of the gains treated in accordance with | |
section 87(4) or 89(2) as accruing in that year to | |
beneficiaries, and | 35 |
NC is the amount of gains so treated as accruing in that year | |
to beneficiaries who were not chargeable to tax for that | |
year. | |
(2) The amount of a settlement’s section 87/89 gains for a year of | |
assessment is— | 40 |
(a) if section 87 applies to the settlement for the year— | |
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(i) the amount of the settlement’s trust gains within | |
the meaning of section 87(2), together with | |
(ii) any amount by which that amount falls to be | |
increased under section 90(1)(a), or would fall to be | |
increased but for section 90(2) or (3); | 5 |
(b) if section 89(2) applies to the settlement for the year | |
(otherwise than by virtue of section 90(1)(c))— | |
(i) the amount of the trust gains referred to in section | |
89(2), together with | |
(ii) any amount by which that amount falls to be | 10 |
increased under section 90(1)(b), or would fall to be | |
increased but for section 90(2) or (3); | |
(c) if section 90(1)(c) applies to the settlement for the year, the | |
amount that falls to be treated as trust gains in accordance | |
with that provision, or would fall to be so treated but for | 15 |
section 90(2) or (3). | |
Gains to be brought into pool on subsequent transfer of value | |
7B (1) Where the trustees of a settlement who have made a transfer of | |
value to which Schedule 4B applies make a further transfer of | |
value to which that Schedule applies, the following provisions | 20 |
apply. | |
(2) If the further transfer is made in the same year of assessment as the | |
original transfer, any Schedule 4B trust gains accruing by virtue of | |
the further transfer are brought into the settlement’s Schedule 4C | |
pool at the end of the year. | 25 |
(3) If the further transfer is made in a later year of assessment at the | |
beginning of which there are outstanding gains in the settlement’s | |
Schedule 4C pool— | |
(a) any Schedule 4B trust gains accruing by virtue of the | |
further transfer, and | 30 |
(b) any outstanding section 87/89 gains of the settlement at | |
the end of the later year of assessment, | |
are brought into the settlement’s Schedule 4C pool at the end of | |
the later year. | |
“Outstanding gains in the settlement’s Schedule 4C pool” means | 35 |
gains in that pool that have not been attributed to beneficiaries in | |
accordance with this Schedule. | |
(4) If the further transfer is made in a later year of assessment at the | |
beginning of which the settlement no longer has a Schedule 4C | |
pool, the provisions of this Schedule apply in relation to the | 40 |
further transfer as they applied in relation to the original transfer. | |
(5) For the purposes of this paragraph a settlement is treated as | |
continuing to have a Schedule 4C pool until the end of the last year | |
of assessment in which there are any gains in the pool.”. | |
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Attribution of gains to beneficiaries | |
4 (1) For paragraphs 8 and 9 (attribution of gains to beneficiaries) substitute— | |
“Attribution of Schedule 4C gains to beneficiaries | |
8 (1) The gains in a settlement’s Schedule 4C pool at the end of any year | |
of assessment are treated as chargeable gains accruing in that year | 5 |
to beneficiaries who receive in that year, or have received in an | |
earlier year, capital payments from the trustees of any settlement | |
that is a relevant settlement in relation to the pool. | |
Paragraph 8A defines “relevant settlement” for this purpose. | |
(2) The attribution of chargeable gains to beneficiaries under this | 10 |
paragraph shall be made in proportion to, but shall not exceed, the | |
amounts of the capital payments made to them. | |
Paragraphs 8B and 8C provide for the matching of gains with | |
available capital payments. | |
(3) A chargeable gain shall not be treated as accruing to a beneficiary | 15 |
under this Schedule unless he is chargeable to tax for that year of | |
assessment. | |
(4) For the purposes of this Schedule a beneficiary is “chargeable to | |
tax” for a year of assessment if, and only if— | |
(a) he is resident in the United Kingdom for any part of that | 20 |
year or is ordinarily resident in the United Kingdom for | |
that year, and | |
(b) he is domiciled in the United Kingdom for any part of that | |
year. | |
(5) Any gains in a settlement’s Schedule 4C pool that are not | 25 |
attributed to beneficiaries in a year of assessment are carried | |
forward to the following year of assessment, when this paragraph | |
applies again. | |
Relevant settlements | |
8A (1) This paragraph specifies what settlements are relevant settlements | 30 |
in relation to a Schedule 4C pool. | |
(2) The transferor and transferee settlements in relation to the original | |
transfer of value are relevant settlements. | |
(3) If the trustees of any settlement that is a relevant settlement in | |
relation to a Schedule 4C pool— | 35 |
(a) make a transfer of value to which Schedule 4B applies, or | |
(b) make a transfer of settled property to which section 90 | |
applies, | |
any settlement that is a transferee settlement in relation to that | |
transfer is also a relevant settlement in relation to that pool. | 40 |
(4) If the trustees of a settlement that is a relevant settlement in | |
relation to a Schedule 4C pool make a transfer of value to which | |
Schedule 4B applies, any other settlement that is a relevant | |
settlement in relation to that pool is also a relevant settlement in | |
relation to the Schedule 4C pool arising from the further transfer. | 45 |
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Attribution of gains in Schedule 4C pool | |
8B (1) The following rules apply as regards the attribution of the gains in | |
a settlement’s Schedule 4C pool to beneficiaries of relevant | |
settlements. | |
This paragraph has effect subject to paragraph 8C (order of | 5 |
attribution as between gains in Schedule 4C pool and other trust | |
gains). | |
(2) Gains of earlier years are attributed to beneficiaries before gains of | |
later years. | |
(3) For the purposes of this Schedule the year of a gain is determined | 10 |
as follows— | |
(a) a Schedule 4B trust gain is a gain of the year of assessment | |
in which the transfer of value in question takes place; | |
(b) a section 87/89 gain is a gain of the year of assessment in | |
which it first forms part of a settlement’s trust gains in | 15 |
accordance with section 87(2). | |
(4) Gains of the same year are matched with available capital | |
payments made at any time by trustees of any relevant settlement. | |
(5) If gains of one year are wholly matched, gains of the next year are | |
then matched, and so on. | 20 |
(6) The gains are attributed to beneficiaries in proportion to, but not | |
so as to exceed, the amount of available capital payments received | |
by them. | |
Attribution of gains: Schedule 4C pool gains and other gains | |
8C (1) Where in a year of assessment— | 25 |
(a) gains in a settlement’s Schedule 4C pool fall to be | |
attributed to beneficiaries of relevant settlements, and | |
(b) one or more of those settlements also have gains that fall to | |
be attributed to beneficiaries under section 87(4) or 89(2), | |
the provisions of paragraph 8B have effect as follows. | 30 |
(2) The rules in that paragraph apply in relation to all the gains falling | |
to be so attributed. | |
(3) As between gains of the same year, Schedule 4C gains are | |
attributed to beneficiaries before other gains. | |
Attribution of gains: available capital payments | 35 |
9 (1) In any year of assessment capital payments made to a beneficiary | |
by the trustees of a relevant settlement, in that year or any earlier | |
year, are available for the purposes of paragraphs 8 to 8C subject | |
to the following provisions. | |
(2) A capital payment is no longer available to the extent that | 40 |
chargeable gains have, by reason of it, been treated as accruing to | |
the recipient in an earlier year of assessment— | |
(a) under this Schedule, or | |
(b) under section 87(4) or 89(2). | |
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