»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp transferor settlement’s assets consist of shares with a market value of £400,000 and cash of £100,000. »Ê¹ÚÌåÓýapp shares are transferred to the transferee settlement in 2012-13. »Ê¹ÚÌåÓýapp cash remains in the transferor settlement. »Ê¹ÚÌåÓýapp transferee settlement pays £300,000 to the transferor settlement for the shares. No capital payments have been made out of the transferor settlement. »Ê¹ÚÌåÓýapp transferor settlement has the following gains made by the trustees:

Year	-	Amount
2005-06	Trustees� gains (section 2(2) amount)	£20,000
2012-13	Section 2(2) amount on transfer of shares	£75,000

This transfer of part of the settled property brings in the ‘relevant proportionâ€� rules in TCGA92/S90(3) and (4) in deciding how much of the unmatched section 2(2) amounts are transferred to the transferee settlement. In calculating the ‘relevant proportionâ€� you deduct the amount paid by the transferee settlement from the ‘market value of the property transferredâ€�. »Ê¹ÚÌåÓýapp relevant proportion is 1/5 ([£400,000 - £300,000] / [£400,000 + £100,000]).

Transferee settlement

»Ê¹ÚÌåÓýapp transferee settlement acquires the following unmatched section 2(2) amounts:

Year	Amount	-
2005-06	£4,000	(£20,000 x 1/5)
2012-13	£15,000	(£75,000 x 1/5)

»Ê¹ÚÌåÓýappy are added to any unmatched section 2(2) amounts it already has and can be matched with capital payments made from the transferee settlement in 2012-13 or a later year.

This applies whatever the residence status of the transferee settlement.

Transferor settlement

»Ê¹ÚÌåÓýapp unmatched section 2(2) amounts of the transferor settlement are reduced by the section 2(2) amounts that have been treated as transferred to the transferee settlement. »Ê¹ÚÌåÓýapp unmatched section 2(2) amounts become:

Year	Amount	-
2005-06	£16,000	(£20,000 - £4,000)
2012-13	£60,000	(£75,000 - £15,000)

This reduction has effect for matching in the year after the year of transfer (2013-14) and subsequent years.