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This example illustrates the principle that you do not adjust the matching of capital payments and section 2(2) amounts in the transferee settlement if the section 2(2) amounts are increased on a transfer.

All the settled property of the transferor settlement is transferred to the transferee settlement for nil consideration in 2012-13. 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 all settled property	£75,000

»Ê¹ÚÌåÓýapp transferee settlement acquires these unmatched section 2(2) amounts. »Ê¹ÚÌåÓýappy are added to any unmatched section 2(2) amounts it already has. This applies whatever the residence status of the transferee settlement.

»Ê¹ÚÌåÓýapp unmatched section 2(2) amounts in the transferor settlement are now reduced to Nil.

In its own right the transferee settlement had:

Year	-	Amount
2001-02	Trustees� gains (section 2(2) amount)	£10,000
2004-05	Capital payments	£30,000
2006-07	Trustees� gains (section 2(2) amount)	£50,000

This has resulted in chargeable gains treated as accruing to the beneficiary of:

Year	Amount	-
2004-05	£10,000	(Also possible increase in tax charged under TCGA92/S91)
2006-07	£20,000	-

»Ê¹ÚÌåÓýappre is no reworking of this matching when section 2(2) amounts are transferred from the transferor settlement. So the 2005-06 section 2(2) amount transferred in is not matched with any of the 2004-05 capital payments. »Ê¹ÚÌåÓýapp transferee settlement has unmatched section 2(2) amounts to carry forward of:

Year	Amount	-
2005-06	£20,000	From transferor settlement
2006-07	£30,000	In its own right
2012-13	£75,000	From transferor settlement