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HMRC internal manual

International Manual

International movements of capital: Previous rules

Previous legislation

FA09/S37 introduced SCH 17 which provides for the repeal of the Treasury Consents legislation and the introduction of a new reporting requirement in respect of certain international movements of capital.

The provision that became ICTA88/S765 was originally introduced in 1951. Subsequent consolidation and amendment divided this into ICTA88/S765, 766 and 767. More recently European developments drove the introduction of S765A.

The situations to which ICTA88/S765 has been applied over the decades have changed in reaction to significant developments in UK tax law such as the introduction of capital gains tax and the controlled foreign company rules as well as to commercial developments.

To ease administration S765 and its predecessors provided that the Treasury could issue ‘general consents’. If a transaction was within a general consent the company did not have to make a special application, it could go ahead and do what it proposed.

ICTA88/S765A removed from the consent regime all movements of capital to which the European Community Directive on Capital Movements applied. But although companies no longer needed Treasury consent they were required to report to HMRC any transaction they carried out to which, but for S765A, they would have needed special consent.

There is extensive guidance on ICTA88/S765 and S765A in the Company Taxation Manual (see CTM34300). S765A required reports to be submitted to HMRC within six months of the transaction being carried out. Some of the guidance in the Company Taxation Manual will therefore remain relevant until all transactions carried out before 1 July 2009 have been reported.