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Posted Fri, 02 Feb 2024 16:40:50 GMT by Hannah Grinnall
A client's investment company accidentally sold some of their investments in the tax year and are compensating the client for the Capital Gains Tax that will be due and for the amount of investment growth that would have happened had they not sold the investments. Is the reimbursement of the Capital Gains Tax the client must pay a taxable receipt, if so, how? Is the reimbursement of the investment growth lost a taxable receipt, if so, how?
Posted Wed, 07 Feb 2024 11:35:04 GMT by HMRC Admin 20 Response
Hi Hannah Grinnall,
There are a number of points to consider where chargeability to CGT on compensation is concerned,
refer to CG15740 - Compensation: asset lost/ destroyed
and
CG12702 - Disposal of assets: examples.  
CG12948 - Capital sums derived from assets: s22(1)(a) TCGA92: compensation
and in particular to
CG12971 - Capital sums derived from assets: section 22(1) TCGA 1992: compensation: practical considerations
Thank you.

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