@leebear Welcome to the forum 🙂
If, for example I was playing as Russia and I lost my capital to Germany, I would hand all my IPC’s to Germany and be unable to receive income or build any troops until my capital was liberated.
That is correct.
If during this time I then somehow managed to use my remaining Russian troops to conquer Berlin (lets assume Germany had bled itself dry taking Moscow) then Germany would have to hand me its IPC’s, which I could not spend? Is that right?
Yes, you are correct, see the rulebook, page 18:
“… For example, if Germany captures Moscow while the Soviet Union’s player is holding 6 IPCs, those IPCs are immediately transferred to Germany’s player. You collect these IPCs even if your own capital is in enemy hands.”
Thanks for the response. I guess they are handy to get you started again if your own capital is liberated.