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HMRC internal manual

Capital Gains Manual

Capital sums derived from assets: section 22(1) TCGA 1992: extra statutory concession D33 amended from 27 January 2014: reviewing a claim

The Commissioners of HMRC can exercise their discretion in the collection and management of the tax system as set out at Section 5 Commissioners of Revenue and Customs Act 2005 (ADML3100). Generally HMRC must apply the law correctly but the Commissioners may exercise limited managerial discretion in the collection of the taxes and duties in their care. In exercising this discretion the Commissioners usually seek to ensure they obtain the highest net return to the Exchequer (ADML3300).

A claim for HMRC to extend the exemption in extra statutory concession D33 beyond the first £500,000 will be considered in the light of the Commissioner’s collection and management powers not to collect the full amount of tax due under the law in limited circumstances. The use of the Commissioner’s collection and management powers must be authorised at the appropriate level. As such it is mandatory to refer a claim to the Capital Gains Technical Group for approval before responding to the claimant.

Conditions for allowing a claim

A claim that meets all of the following conditions will be accepted:

  1. the right of action was acquired in connection with goods or services that the payer - or a connected person (CG14580 et seq), associated company (CTM03530) or person acting in an intermediary capacity for the payer - has provided as part of their trade, profession or vocation;
  2. the first condition shall be considered to be met in all cases where the right of action relates to mis-selling of a financial product and the person who provides that financial product is regulated by the Financial Conduct Authority;
  3. the payee did not acquire the right of action by means of a spouse’s or civil partner’s transfer (CG10790) or by a transfer within a group (CG45300+);
  4. the payee did not acquire the right of action from another person for consideration (CG14500).


  • Capital sum means the amount received in a single set of legal proceedings that is capital in nature and is derived from a right of action where there is no underlying asset.
  • Payee means the person who is entitled to receive the capital sum due to the right of action.
  • Payer means the person who made the payment to the payee, or to a representative of the payee such as a solicitor.

In cases of difficulty the matter should be escalated using the current process.