»Ê¹ÚÌåÓýapp

All the settled property of the transferor settlement is transferred to the transferee settlement for nil consideration in 2009-10. No capital payments have been made out of the transferor settlement. »Ê¹ÚÌåÓýapp transferor settlement made no gains before the transfer.

Gains of £100,000 accrue on the transfer. »Ê¹ÚÌåÓýappse are on the disposal of an asset held by the trustees since 2001. »Ê¹ÚÌåÓýapp post 5 April 2008 element of the gain is £15,000 based on the difference between the value at 6 April 2008 and the value at the time it is transferred.

»Ê¹ÚÌåÓýapp transferee settlement has no unmatched section 2(2) amounts of its own. Its only unmatched section 2(2) amount is the £100,000 for 2009-10 it is treated as receiving on the transfer.

In 2014-15 the transferee settlement makes a capital payment of £300,000 to a UK resident but non-UK domiciled beneficiary. Under section 87 £100,000 of the capital payment is matched with the section 2(2) amount and a £100,000 chargeable gain is treated as accruing to the beneficiary.

If a valid election under paragraph 126 Schedule 7 has been made by the trustees of the transferor settlement then only the post 5 April 2008 element of the gain (£15,000) is chargeable to tax on the beneficiary. That is subject to the remittance basis if the beneficiary is a remittance basis user.

If no valid election has been made by the trustees of the transferor settlement then the full £100,000 is chargeable to tax on the beneficiary. Again this is subject to the remittance basis if the beneficiary is a remittance basis user.

An election made by the trustees of the transferee settlement has no effect on this gain.