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Where Taxpayers and Advisers Meet

CGT applicable period split year - new UK residents

Colboz
Posts: 3
Joined: Fri Oct 11, 2019 4:08 pm

CGT applicable period split year - new UK residents

Postby Colboz » Sat Oct 12, 2019 12:50 pm

Some friends of mine became UK residents on 1st August 2018 - which is when the husband started working.
So for that particular tax year for income, the split year treatment would apply to income from dividends etc

Would the same split year treatment apply to CGT from offshore mutual funds that they sold some 6 months later to fund
the purchase on their home ?

Would the gains (the Applicable period) be calculated from 31st July 2018 - when they were not UK Residents until the sale
of the funds - when they were considered to be tax residents ?

darthblingbling
Posts: 281
Joined: Wed Aug 02, 2017 9:09 pm

Re: CGT applicable period split year - new UK residents

Postby darthblingbling » Sat Oct 12, 2019 10:31 pm

There's no uplift to the date they first became resident

Colboz
Posts: 3
Joined: Fri Oct 11, 2019 4:08 pm

Re: CGT applicable period split year - new UK residents

Postby Colboz » Wed Oct 16, 2019 8:25 am

Many, many thanks for that. Could you please help with 2 further questions

Do they take the USD gain and use the FX on the day of the sale to translate it to GBP ?

Normally this would come under CGT. However the funds are Offshore Mutual non-reporting - so I'm told they would be taxable under Income Tax.
Would the CGT allowances be applied first, and then the remaining amount be Income Tax'able ?

darthblingbling
Posts: 281
Joined: Wed Aug 02, 2017 9:09 pm

Re: CGT applicable period split year - new UK residents

Postby darthblingbling » Wed Oct 16, 2019 10:51 am

If they're subject to income tax then the annual exempt allowance cannot be used.

There is no strict rule on FX rates. But whatever rate you do use should either be published by HMRC or a market rate from a reputable source and you should be consistent in how you apply them; could be average for that tax year or spot rates.

You should exchange both the cost basis and the proceeds at the appropriate rates. Don't just exchange the gain

darthblingbling
Posts: 281
Joined: Wed Aug 02, 2017 9:09 pm

Re: CGT applicable period split year - new UK residents

Postby darthblingbling » Wed Oct 16, 2019 1:11 pm

*cannot be used on the non reporting gains that is.

Colboz
Posts: 3
Joined: Fri Oct 11, 2019 4:08 pm

Re: CGT applicable period split year - new UK residents

Postby Colboz » Thu Oct 17, 2019 2:16 pm

Many, many thanks again .


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