Usually for economic reasons a foreign state may
“block” the transfer of capital from its banks and
other financial institutions for an unspecified period. For a
taxpayer with chargeable assets in such a country there may be real
problems in realising sufficient money to discharge the total debt.
Extra statutory concession F6 (ESCF6) allows a taxpayer to
defer the payment of the tax due on the blocked foreign assets
until the restrictions are lifted, or the assets are otherwise
remitted outside the foreign state, or the assets are used and
enjoyed by the persons entitled to them. The taxpayer is expected
to discharge the debt as soon as any money is remitted to the UK.
The concession does not apply to lifetime transfers.
Shares and Assets Valuation (Foreign) are responsible for
agreeing the date of death value of any blocked assets that may
qualify for a significant discount and are also required to satisfy
themselves that the concession applies.
To obtain the concession the taxpayer must provide an
undertaking on form Val 159, that among other things, specifically
confirms their intention to use their best endeavours to have the
value of the blocked assets remitted to the UK.
While the enquiry remains open the responsibility for
policing the Val 159 remains with the caseworker.
If the enquiry is settled but the debt unpaid the case must
be sent to Debt Management & Banking (
IHTM38000) with a suitable memo
attached. Debt Management & Banking will then monitor the
taxpayer’s compliance with their undertaking to pay all tax
due.
