Calculating CGT on foreign shares

[petrock]

I buy and sell shares in US dollars.

1. Can someone explain the process of calculating the capitals gains in sterling - do the conversions have to be done on acquisition and disposal amounts, or only on the USD gains

2. If the former, and the calculation provides apparent GBP gains very different from the USD gains, can that difference also be treated as a loss (or gain)

3. I have trawled the HMRC site for info to no avail - does anyone know an HMRC info source that covers it.

Thank you

[tom 7000]

calculate the sterling on the day you bought teh shares and thats your cost
calculate the sterling on the day you sold the shares and thats your proceeds
take one from the other and thats your gain.

[maths]

As "tom7000" states it is the acquisition cost and the disposal proceeds which are each converted into £ at the two respective dates.

EG
Asset bought $100 [$2/£1 ie £50]

Sold for $75 [$1/£1 ie £75]

CG for UK CGT £25

$ loss of $25 irrelevant for UK CGT.

[Kiwi1975]

I have a further related question.

If proceeds from the sale of foreign shares are kept in an overseas, non stirling, foreign currency account, and the proceeds are later used to acquire other foreign shares, are movements in the value of the foreign currency against stirling subject to CGT? I think the answer is yes and that would look at the change in stirling value between the first and second transaction.
but would appreciate any guidance on this? Also can oy offet any loss on forex vs stirling?
Does anyone know of any good materials explaining such a calculation in detail?
I have seen the guides on the HMRC website and understand how to calc the CGT on the share, but nothing that deals both issues.

Many thanks

[maths]

Foreign currency bank accounts are chargeable assets for CGT.

Thus, any withdrawal constitutes a disposal thus precipitating a capital gain/loss.

Computed by taking £ value at date of deposit of monies into account and £ value at date of withdrawal. If only some of the proceeds are withdrawn then a partial disposal occurs.

[Kiwi1975]

Foreign currency bank accounts are chargeable assets for CGT.

Thus, any withdrawal constitutes a disposal thus precipitating a capital gain/loss.

Computed by taking £ value at date of deposit of monies into account and £ value at date of withdrawal. If only some of the proceeds are withdrawn then a partial disposal occurs.

Thanks very much, noted the terrible spelling in post, was done late in the evening.
As I understand it, in the case of a partial acquisition or disposal of foreign currency, timing/priority is based on the same rules that apply to share acquisitions and disposals.

[lomond1965]

Hi
Apologies for picking upp this thread again.

One further q - assuming the foreing currency proceeds are kept in the same currency and not converted to sterling, what will HMRC accept as a reasonable source of exchange rate information for calculating the sterling proceeds?

I have heard oanda.com is acceptable - is that right (are there any others)?
Should one use interbank rates?
Should one use high, low, close, open or average?
And can one apply a notional spread (probably not but those rates are cheap compared to those available to the punters in the retail client market).

I would guess the key point would be to be consistent in using the same source and data type (ie average).

I have searched HMRC website but cannot find any guidance on this, so any pointers greatly appreciated.

[mullet]

oanda.com

That will do fine. I am sure that HMRC guidance tells Inspectors to accept a reasonable conversion method, but I can't find it at the moment. High, low or average? As long as the approach is consistent, I don't think it matters. Using the most beneficial rate to suit would not go down well with HMRC!

[HTK421]

I have a question stemming from the beautifully simple answer from Tom700...

I sold my RSUs in USD and transferred funds to my UK Bank

To calculate my gain I used the FX rate on the day that my RSUs vested, and the FX rate on the day I sold them (as suggested).
However, by the time I actually revived the cheque and got it cashed by my UK bank, the exchange rate had changed again and the 'actual' sum that I received was even less.
Therefore my 'gain' was actually less than calculated.

How do account for the FX changes between the date I sold them and the date my bank actually cached the cheque?

Should I simply be using the date my bank cached the cheque instead.?

[bd6759]

How do account for the FX changes between the date I sold them and the date my bank actually cached the cheque?

You don't.