CGT on non-UK assets

[neillp]

Hi, I would ask you the same question as King_Maker, let's put HMRC aside, do you think that a person that had made this investment, is any better off?

[bd6759]

What is the gain for UK CGT purposes?

Being "better off" is not a tax concept and was not what you asked. CGT is based on assets, not on liabilities. The outcome of the transactions is that the person made a gain of 500K, and utilised that gain to pay a liability.

That is the simple fact. Whether on not anyone agrees with your analysis that it might not be fair is pretty much irrelevant.

[neillp]

No gain is required to pay off the liability, the asset has the same value as the liability the whole time.

[bd6759]

Yes, but a liability is not an asset.
The capital gain is on the increase in the sterling value of assets.
It is unfortunate that this person also had a liability and needed more sterling to pay it off, but that liability has nothing to do with the gain.

[Matthew P]

On a big deal like this, HMRC's position makes sense. But for anyone who (like me) is resident in England but has most of my assets in $, it could make life very difficult.

Every time I convert $ into £, am I required to make a CGT calculation?

Beginning date:
And when do I value the gain from? You could say, from when the sum entered the bank account. But when was that? Money is like water, a bank account is a pool of funds indistinguishable by date of entry.

End date:
To probe further, which of these count as "end dates"?
(a) when a $ sum is moved from an offshore $-denominated account, to an onshore $-denominated account?
(b) when a $ sum in an offshore account, is converted into a £ sum, held in an offshore account?
(c) when a $ sum in an offshore account is converted into a £ sum, and immediately remitted to an onshore account?

Does HMRC provide comprehensive guidance on this issue?

[bd6759]

Money held in a bank account is not subject to CGT.