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»Ê¹ÚÌåÓýapp trusteesâ€� section 2(2)* amount for 2012-13 is £40,000. »Ê¹ÚÌåÓýappy make no capital payments until 2014-15 when a capital payment of £50,000 is matched against the earlier year’s section 2(2) amount giving the beneficiary a TCGA/S87 gain of £40,000 in 2014-15.

»Ê¹ÚÌåÓýapp beneficiary is a higher rate Income Tax payer and therefore pays Capital Gains Tax at 28%. »Ê¹ÚÌåÓýappy have personal gains of £15,000. »Ê¹ÚÌåÓýapp annual exempt amount for 2014-15 is £11,000.

»Ê¹ÚÌåÓýapp annual exempt amount is set first against the section 87 gains reducing those gains to £29,000. »Ê¹ÚÌåÓýapp rate of Capital Gains Tax is increased by 10% for each of the two years after the year following the year in which the section 2(2) amount accrued to the trustees; ie the two years after 2012-13. »Ê¹ÚÌåÓýapp rate of Capital Gains Tax on the s87 gains is increased by 2 x 2.8% to 33.6%.

»Ê¹ÚÌåÓýapp total Capital Gains Tax payable in 2014-15 is:

£15,000 @ 28% = £4,200

£29,000 @ 33.6% = £9,744

*»Ê¹ÚÌåÓýappse sections were re-written for disposals from 6 April 2019 see CG10150.