CG78700 - Compensation: confiscated property: what this chapter is about

These instructions tell you how to deal with cases where taxpayers

• have received, directly or indirectly, compensation from a foreign Government in respect of confiscated property located outside the UK

or

• have had confiscated property located outside the UK restored to them by a foreign Government.

or

• have received compensation in consequence of any recommendation of the Spoliation Advisory Panel, see CG78710, or of any equivalent body set up outside the UK.

or

• have received compensation in settlement of legal claims, or by the order of any recognised court or legal tribunal with jurisdiction to cover such claims, to the effect that the original seizure or enforced transfer of the property was wrongful and should be declared illegal, see CG78710.

Certain cases of this type are exempt from Capital Gains Tax under ESC/D50 which was introduced on 19 December 1994 and extended on 20 December 2000. The Concession applies to all such cases open on those dates and CG78705+ tell you about it. The instructions at CG78709+ which deal with individual countries also tell you which are currently covered by the Concession. You will be told of any additions to these.

At various times, often because of war or revolution, property located in foreign countries has been appropriated or confiscated by the Governments of those countries. Examples include the Bolshevik Revolution in Russia and the Nazi persecutions in Germany and the occupied countries. In some cases, compensation may subsequently be paid to the original owners, their beneficiaries or descendants following an agreement between the foreign Government and the UK Government. In other cases the property may be restored to the original owners, their beneficiaries or descendants under legislation enacted by the foreign Government. Alternatively, compensation may be paid by the foreign Government.