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HMRC internal manual

Capital Gains Manual

Compensation: displaced tenants: statutory compensation

The taxpayer may contend that the compensation received is exempt from Capital Gains Tax. It will usually be contended that the exemption arises because the receipt is `statutory compensation’. Such compensation was considered in the cases of Davis v Powell, 51TC492, see CG72400-CG72403, and Drummond v Brown, 58TC67, see CG72351-CG72352, and in both cases it was decided that the compensation was exempt from CGT.