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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Foreign currency: foreign currency bank accounts: treatment of withdrawals and debits for individuals - SP10/84 for periods up to 5 April 2012

Where an individual, domiciled in the UK has two or more bank accounts denominated in a particular foreign currency then those accounts are treated as a single account and direct transfers between them are disregarded for capital gains purposes. This is the result of SP10/84 applying. This means that such transfers are treated as involving neither a disposal of the account debited nor an addition to (or acquisition of) the account credited. This practice does not apply to transfers into or out of the UK by non-UK domiciled individuals. Where SP10/84 is applied, the practice must be followed consistently.

The scope of SP10/84 was extended to from 6/4/2008 with the effect that a non-UK domiciled individual with foreign currency bank accounts in a particular currency both in the UK and overseas may treat all the UK accounts as one ‘aggregated’ account and all the overseas accounts as a second, distinct, ‘aggregated’ account. However a direct transfer from an overseas account to a UK account, or vice versa, even if in the same currency, will not be disregarded for capital gains purposes and the individual will need to consider whether a computation of his or her capital gain or loss will be necessary in order to make a correct tax return.

If it is decided to adopt SP10/84 for either UK or offshore accounts in a particular currency that decision can only be revisited:

  • for the UK accounts in the particular currency if all the UK accounts in that currency are cleared down such that no debt is owed to the taxpayer; and
  • for the offshore accounts in the particular currency if all the offshore accounts in that currency are cleared down such that no debt is owed to the taxpayer.

Where the amount of net gains from transfers from overseas non-sterling bank accounts which an individual remits to the UK is less than £500 in any tax year, it will not be necessary to report such gains to HMRC.

For periods from 6 April 2012 the changes introduced by TCGA92/S252 mean that SP10/84 is no longer relevant because foreign currency bank accounts held by individuals, trustees and personal representatives (including members of a partnership) are treated as simple debts and TCGA92/S251 applies.