CG78330 - Currency: foreign currency bank accounts

TCGA92/S252

When currency is deposited in a bank account there is, for Capital Gains Tax purposes, a disposal of the currency for its sterling value at that time. The deposit establishes a debt due by the bank to the depositor. Apart from the debt on a security a debt is not a chargeable asset in the hands of the original creditor, see CG53400+. But TCGA92/S252 prevents that exemption from applying to a debt which is not in sterling and which represents a credit balance in a bank account. Such a debt is a chargeable asset and each withdrawal from the currency account is a (part) disposal of the debt for the sterling value of the currency obtained. The currency obtained on the withdrawal from the bank is acquired for a consideration equal to its sterling value and that amount is allowable in computing the gain or loss on the subsequent disposal of the currency. Foreign currency certificates of deposit in bearer form are not within TCGA92/S252.