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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Liability to date/death: deceased competent to dispose: Example 2

Mr B was resident in the UK whilst working here for a period of years. However he was domiciled in a foreign country. He owned land in that country including the matrimonial home to which he and his wife had intended to return when the period of employment in the UK was completed. He has two children.

Mr B died before returning to the foreign country. Under the laws of that country, on the date of his death the matrimonial home passed immediately to his wife. The other land that he owns also passed automatically, this time to the joint ownership of his children. They have a right to partition their interests so that they ultimately each can have sole ownership of part of the land.

Mr B could not dispose of his land in the foreign country by will accordingly to the laws of that country. However had he been domiciled in the UK and had the land been situated in the UK he would have been able to dispose of it by will. As a result both the matrimonial home and the holding of land are treated as assets of which he was competent to dispose. They therefore benefit from the treatment provided by TCGA92/S62 (1). There is no Capital Gains Tax disposal at the date of death. The wife and the two children acquire their interests at market value at the date of death.