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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Location of assets: types of asset (1): land, tangible property and debts

TCGA92/S271(1) specifies the location of several types of asset:

Land and buildings (TCGA92/S275(1)(a))

Land and buildings are located in the country where they are found. This applies to all rights and interests in the land and buildings. It will therefore apply to leases of land, tenancies etc.

Chattels (TCGA92/S275(1)(b))

Items of tangible moveable property (chattels) are located where they are found at any point in time. This applies to all rights and interests over such assets also. Therefore a lease of a chattel can change from being located in the UK to being located elsewhere if the chattel is removed from the UK to another country.

Debts (TCGA92/S275(1)(c) and (k))

Judgment debts, that is, debts created by the judgments, decrees, etc, of courts of record, are located where the judgment is recorded, TCGA92/S275(1)(k).

The general rule for other debts is that the debt is situated in the UK if and only if the creditor is situated in the UK. This applies whether the debt is secured or unsecured, TCGA92/S275(1)(c). An exception to this rule applied for certain foreign currency bank accounts, see below.

Foreign currency bank accounts (TCGA92/S275(1)(l))

Debts other than debts on a security are normally not chargeable assets, TCGA92/S251, however special rules applied for foreign currency bank accounts for periods up to 5 April 2012, TCGA92/S252.

To deal with certain problems arising from the interaction of this rule with the general rule on the location of debts when dealing with non-domiciled individuals the following exception to the general rule was applied by Section 275(1)(l) TCGA 1992.

If a debt which is not in sterling

  • is owed by a Bank, that is, is an amount standing to a customer’s credit at that bank


  • the customer is an individual who is not domiciled in the UK

then the debt is situated in the UK if and only if

  • the individual is resident in the UK


  • the branch or other place of business of the Bank at which the account is maintained is itself situated in the UK.

From 6 April 2012 for individuals, trustees and personal representatives (including members of a partnership) the normal rules that apply for debts also apply for foreign currency bank accounts TCGA92/S252.

Further guidance on the treatment of foreign currency bank accounts can be found at CG78320+

Ships and aircraft (TCGA92/S275(1)(f)

Contrary to the general rules of international law, for capital gains purposes the location of a ship or air-craft does not depend on its country of registration. Instead the ship or aircraft is located in the UK if and only if the owner is resident in the UK. Similarly any interest or right in or over the ship or aircraft is located in the UK if and only if the owner of the interest or right is resident in the UK.