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HMRC internal manual

Capital Gains Manual

Foreign currency: personal expenditure of individuals


A gain on the disposal of foreign currency acquired by individuals for the personal expenditure outside the United Kingdom of themselves and their family or dependents is not a chargeable gain. This includes expenditure on the provision or maintenance of a residence outside the United Kingdom.

TCGA92/S269 applies only to foreign currency which was specifically acquired for personal expenditure of this kind. If remuneration, interest, dividends or other sums are received in foreign currency, then that foreign currency has not been acquired for the purposes specified in Section 269: it has not been acquired for any specific purpose at all, but simply as remuneration or interest etc. On the disposal of such foreign currency there will be a chargeable gain (or allowable loss) calculated in the normal way.

A debt receivable is not the same thing as currency, and so TCGA92/S252(2) is necessary to provide an analogous exemption from charge for gains on bank accounts which represent foreign currency which would in its own right fall within TCGA92/S269. For the reasons given above, where a sum in a bank account represents remuneration, interest etc, it is not within the scope of section 252(2). The allowable costs are the sterling value of the foreign currency on the date it is acquired.