Capital Gains Overseas Property

[GJM]

UK resident client Sells overseas property but suffered a delay of three months in remitting proceeds back to UK.

For CGT the Sale proceeds are based on Exchange rate at date of sale.

However due to three month delay in remittance of proceeds a loss is incurred
due to deterioration of Exchange rates. Is this an allowable capital loss?

[pawncob]

No. The gain would still arise even if the funds were never remitted to the UK.

[GJM]

No. The gain would still arise even if the funds were never remitted to the UK.

Dear Pawncob - Many thanks for giving the time to reply to me.

I'm not sure if you understood my question and I do apologise if it wasn't clear.

As far as I can see the capital gain on the overseas property is enshrined in stone
based on the Exchange rate at the date of sale.

The separate question I have is in the repatriation of the foreign currency back to the UK.
This is now nothing to do with the sale. Is simply a currency loss which has arisen.

I looked at HMRC manual CG 78336 which gives a very comprehensive example
on the timings of transactions. Although this example deals with gains arising on borrowings
in foreign currency I assume that it will equally apply if the source of money was from capital in the UK.

If it does my clients currency loss (incurred in the same tax year as the sale) will be
available to offset against the chargeable gains of the year.

Does this change your opinion in any way?

[pawncob]

Unless you're a currency dealer, gains/losses on exchange are not chargeable/allowable.