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Finance Act 2012

New section 252 TCGA

3.Section 252(1) restricts the scope of section 251 TCGA. Section 251 exempts gains on certain debts, including credit balances on bank accounts, from tax on chargeable gains. Where the debt is a “foreign currency debt”, section 252(1) limits this exemption to gains accruing to individuals, trustees of settled property and personal representatives of deceased persons.

4.Section 252(2) defines “foreign currency debt” as a credit balance on a bank account in a currency other than sterling.

5.Subsections (2), (3) and (5) of the section make other changes to the TCGA as a consequence of the main change in subsection (4).

6.Subsection (2) removes a redundant rule concerning the attribution of gains to members of non-resident companies in section 13(5)(c) that referred to the original version of section 252 TCGA.

7.Subsection (3) inserts a new section 251(5A) TCGA to make clear that relevant references in section 251 to debt include references to an interest in debts that a person holds, for example, as a joint owner of the account.  It aligns section 251 with new section 252.

8.Subsection (5) repeals the rules in section 252A and Schedule 8A TCGA for calculating chargeable gains and allowable losses where individuals withdraw money from foreign currency bank accounts. The new section 252 prevents chargeable gains or allowable losses from arising to individuals on any such withdrawals, rendering these rules redundant.

9.Subsection (6) provides for the changes to the TCGA to apply from 6 April 2012.

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