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Where Taxpayers and Advisers Meet

sterling conversion on sale of overseas home

gregh_is
Posts: 1
Joined: Thu Mar 19, 2020 3:10 pm

sterling conversion on sale of overseas home

Postby gregh_is » Thu Mar 19, 2020 3:21 pm

Sterling conversion
I moved to the UK from Australia and now I’m looking to sell my family home. To calculate my gain, I’m:
1. converting the purchase price to sterling at the spot rate on the purchase date.
2. converting the sales proceed to sterling at the spot rate on settlement.
3. calculating the sterling gain as the difference between 1 and 2 above.

Is that correct?

I've seperately adjusted for associated expenses and for PPR and letting relief. I'm now domiciled.

Treatment of mortgage
I also have a mortgage on purchase and some mortgage remaining on sale - is that factored into (i) the CGT calculation or (ii) sterling conversion?

Thanks in advance.

pawncob
Posts: 4485
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: sterling conversion on sale of overseas home

Postby pawncob » Thu Mar 19, 2020 5:09 pm

You can use spot rates or average per HMRC tables.https://www.gov.uk/government/publications/exchange-rates-for-customs-and-vat-yearly

Mortgage is irrelevant to the gain position.

Do a search on TW for examples.
With a pinch of salt take what I say, but don't exceed your RDA

AGoodman
Posts: 1029
Joined: Fri May 16, 2014 3:47 pm

Re: sterling conversion on sale of overseas home

Postby AGoodman » Sun Mar 29, 2020 2:41 pm

You may well qualify for principal private residence relief, assuming you were tax resident in Australia while it was your principal home. On a sale before 6/4/2020, you'll get the last 18 months included for free (9 months afterwards).

If you qualify for 100% relief, you may not even need to declare it.

maths
Posts: 7894
Joined: Wed Aug 06, 2008 3:25 pm

Re: sterling conversion on sale of overseas home

Postby maths » Sun Mar 29, 2020 5:30 pm

In addition to private residence relief and lettings relief you will also be entitled to an annual exempt amount (£12,000 for sale pre 6.4.20 or £12,300 thereafter).

As A Goodman comments better if you can "exchange" on the sale pre 6.4.20. Exchange is key, not completion for CGT.

If private residence relief plus annual exempt amount produces no gain then no need to declare sale to HMRC. However, if lettings relief also needs to be claimed to produce a nil gain then it will be necessary to file a Tax Return.


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