Section 88 — Taxation of Chargeable Gains Act 1992: Gains of dual resident settlements.

Gains of dual resident settlements. 88 1 Section 87 also applies to a settlement for any year of assessment beginning on or after 6th April 1991 if—

a the trustees are resident ... in the United Kingdom during any part of the year , and b at any time of such residence ... they fall to be regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom, ... c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 The section 1(3) amount for a tax year for which section 87 applies by virtue of this section is what it would be if the amount mentioned in section 87(4)(a) were the assumed chargeable amount.

3 For the purposes of subsection (2) above the assumed chargeable amount in respect of a year of assessment is the lesser of the following 2 amounts—

a the amount on which the trustees would be chargeable to tax for the year under section 1(3) on the assumption that the double taxation relief arrangements did not apply;

b the amount on which, by virtue of disposals of protected assets, the trustees would be chargeable to tax for the year under section 1(3) on the assumption that those arrangements did not apply.

4 For the purposes of subsection (3)(b) above assets are protected assets if—

a they are of a description specified in the double taxation relief arrangements, and b were the trustees to dispose of them at any relevant time, the trustees would fall to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to them on the disposal.

5 For the purposes of subsection (4) above—

a the assumption specified in subsection (3)(b) above shall be ignored;

b a relevant time is any time, in the year of assessment concerned, when the trustees fall to be regarded for the purposes of the arrangements as resident in a territory outside the United Kingdom;

c if different assets are identified by reference to different relevant times, all of them are protected assets. 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .