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Where Taxpayers and Advisers Meet

Calculating tax due on foreign shares sold

pandora_boite
Posts:23
Joined:Thu Nov 24, 2011 6:51 pm
Calculating tax due on foreign shares sold

Postby pandora_boite » Thu Apr 19, 2012 11:22 am

Hi,

I am seeking advice on how to calculate tax due on foreign shares sold. The context is as follows:
- Non-domicile individual who moved to the UK in Dec 2005, and has held a portfolio of shares for many years before that date.
- Has been claiming the remittance basis until now, but will file on the arising basis for 2011/2012
- Two sets of shares were sold in Feb 2012, one at a profit, and the other at a loss.
- The share were bought and sold in US dollars
- All remaining (unsold) owned shares are foreign

My questions are:
1) How is the profit calculated. What is used as the original share price. Do we calculate what the price of the shares were at the date that they were bought (prior to moving to the UK) or do we use the price of the shares in Dec 2005 when the individual arrived in the UK and use that price as the original price.

2) What exchange rate is used. Is the profit calculated by subtracting original price from sale price and converting this from dollars to GBP at the exchange rate on the sale date? - or do we have to convert the original price to GBP at the exchange rate that was in effect at the date that the shares were bought or the individual moved to the UK.

3) In order to claim losses is it necessary to "file a foreign losses election". I have heard that that is a requirement if one has used the remittance basis at any time. Can someone advise exactly how this is done - what documents to use, and what wording is required.

Thanks in advance for any help and advice.

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