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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Debts: debt satisfied by acquisition of property: disposal by creditor

Accepting the property in satisfaction of the debt (or part disposal of the debt) is treated as a disposal (or part disposal) of the debt. The normal Capital Gains Tax rules described in this section apply to this disposal. If the debt is a chargeable asset the creditor is treated as having disposal proceeds equal to the market value of the property. If the debt is not a chargeable asset then there is no occasion of charge.


A creditor is prepared to accept land worth £70,000 in full satisfaction of the debt on a security worth £100,000. The creditor is treated as having disposed of the debt on a security for a consideration of £70,000.