Section 268B | Compensation for deprivation of foreign assets ^F1

(1)A gain is not a chargeable gain if—^F1

(a)it accrues to a person on receipt of a capital sum paid by way of compensation for the deprivation of a foreign asset,^F1

(b)no legal redress was available when the deprivation occurred, and^F1

(c)the sum is paid as the result of a relevant compensation award.^F1

(2)A relevant compensation award is an award or distribution made—^F1

(a)under—^F1

(i)an Order in Council made under the Foreign Compensation Act 1950, or^F1

(ii)arrangements established by the government of a territory outside the United Kingdom that are equivalent in effect to such an Order,^F1

(b)as a result of a recommendation of—^F1

(i)the Spoliation Advisory Panel, or^F1

(ii)a body outside the United Kingdom whose purposes and functions are equivalent to those of the Panel, or^F1

(c)in settlement of a legal claim to the effect that the deprivation was unlawful or in accordance with an order to that effect made by a court, tribunal or other competent authority with jurisdiction to decide such a claim.^F1

(3)Reference in this section to the payment of a capital sum by way of compensation for the deprivation of a foreign asset includes—^F1

(a)payment as a result of the abandonment or extinguishment of rights in respect of the deprivation;^F1

(b)return of the asset itself.^F1

(4)In the case of a gain accruing to a person other than the original owner—^F1

(a)subsection (1) does not apply if consideration had been given at any time (whether by that person or someone else) for the right to receive the compensation, but^F1

(b)consideration given on an acquisition falling within section 58(1) or 171(1) is to be ignored for these purposes.^F1

(5)If the capital sum is paid (or the foreign asset returned) to a person to whom an allowable loss has accrued as a result of—^F1

(a)the deprivation of the foreign asset, or^F1

(b)the abandonment or extinguishment of rights in respect of the deprivation,^F1

subsection (1) applies only to so much of any gain as exceeds that loss.

(6)For a person to obtain relief under this section, the person must make a claim.^F1

(7)If the capital sum is paid by means of the transfer of an asset (or the foreign asset is returned), that asset is to be treated for the purposes of computing a gain or a loss on its subsequent disposal as if it were acquired for a consideration equal to its market value at the time of the transfer.^F1

(8)In this section—^F1

“capital sum” means money or money’s worth;

“deprivation”, in relation to a foreign asset, includes deprivation resulting from—

the seizure, confiscation, forfeiture, destruction or expropriation of the asset,

the disposal of the asset by a sale under duress for less than market value;

“foreign asset” means an asset which was situated outside the United Kingdom at the time of the deprivation;

“legal redress”, in relation to the deprivation of a foreign asset, means a right to recover the asset or to receive compensation for the deprivation;

“original owner” means the person who owned the foreign asset at the time of the deprivation;

“Spoliation Advisory Panel” includes any successor to that Panel.

(9)This section does not apply in relation to a gain to which section 268A applies.^F1