HMRC have now published the form for the rebasing election. Some fears had been expressed that HMRC would require a disproportionate amount of information to enable rebasing to be claimed – but this has proved not to be the case. The form merely requests the name and date of the settlement, the name and address of the trustees and the date of the capital payment that is the trigger for the rebasing election.
The purpose of the election is to ensure that foreign-domiciled beneficiaries who receive capital payments will not be taxed on the amount of the gains up to 6 April 2008 made by the trustees or by an underlying company.
The election causes the gain on the disposal of an asset by the trust (or underlying company) to be divided between pre- and post-5 April 2008 elements. The gain up to 5 April 2008 will not be chargeable to tax on a foreign-domiciled beneficiary. However, the election will have no effect on UK-resident and domiciled beneficiaries, who can continue to have the full amount of the gain attributed to them by reference to capital payments in the normal way.