CG38765 - Matching: non-UK domiciled beneficiary - unmatched capital payment for year before 2008 - 09 - example
FA08/Sch07/para124
| Year | - | Amount |
|---|---|---|
| 2005 -06 | Capital payments received | 拢10,000 |
| 2008-09 | Capital payments received | 拢16,000 |
| - | Section 2(2) amount | 拢24,000 |
Section 87 gains
The 2008-09 section 2(2) amount is matched on the usual LIFO basis. So the 拢24,000 is matched first against the 2008-09 capital payment leaving a balance of 拢8,000 to be matched against the 2005-06 capital payment. The 2005-06 capital payment is reduced to 拢2,000 (拢10,000 - 拢8,000) and the 2008-09 section 2(2) amount is reduced to nil.
If the beneficiary was non-domiciled in 2008-09 they would be charged to Capital Gains Tax only on the 拢16,000 matched to the 2008-09 capital payment. The fact that no tax is charged doesn鈥檛 prevent the matching and the reduction in the 2005-06 section 2(2) amount and capital payment.