No separate asset

The taxpayer claimed capital losses for 2008/09 and 2009/10 on the basis a certificate of deposit had become of negligible value after having been issued to him by an overseas bank that had been put into liquidation.

HMRC refused the claim saying the certificate was not a dollar asset but a debt denominated in sterling meaning under TCGA 1992 s 251(1) no gain or loss could accrue on disposal.

The First-tier Tribunal ruled the asset was a sterling deposit with the bank regardless of whether or not the bank then converted it into dollars and invested it in dollar assets. It was a sterling debt and no gain or loss could arise on its disposal.

The tribunal referred to Zim Properties Ltd v Proctor 58 TC 371 to say the taxpayer had a right of action against the overseas bank but that...