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HMRC internal manual

Capital Gains Manual

Europe: fishing quotas: introduction

There are a number of quota schemes which regulate the catching of fish in waters surrounding the UK. The precise scheme depends on the species of fish, for example herring, being caught. However, there are common constituents to all the schemes.

Each involves

  • a fishing vessel
  • a fishing vessel licence
  • a track record
  • an allocation of quota.

Separate assets

Although any fisherman operating in waters surrounding the UK will own some or all of these assets, each is regarded as a separate asset for Capital Gains Tax purposes. This applies even where it is common within the fishing industry to transfer a number of them together, for example a vessel will normally be sold along with its track record and associated quota. In the case of MV Endeavour and Others v Inland Revenue SpC403, the partners had disposed of a fishing vessel, its licence and track record in a single transaction. The Commissioners found as a fact that the partners had disposed of three separate assets.

In these cases any necessary apportionment of the sale proceeds or acquisition costs between the various assets should be on a `just and reasonable’ basis having regard to the facts, TCGA92/S52 (4), see CG14771+.

If an apportionment is required to compute a balancing adjustment because a vessel has qualified for capital allowances, see also CA23200+.

Where a particular point is not specifically mentioned in this section then you should assume that the normal Capital Gains Tax rules apply and if necessary refer to the appropriate part of the Manual.

The UK fish quota management scheme turns on the ownership of a particular vessel which then gives the owner or charterer of that vessel an entitlement to a licence for it and then, in turn, a track record and an allocation of quota. For convenience, therefore, this guidance uses the term `owner’ to describe the person or persons having an entitlement to any or all of these.

Where a vessel is operated by a partnership or similar joint venture, then we would expect the vessel and the associated licence etc. to be treated as partnership assets, see CG27200+.