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Posted Fri, 22 Sep 2023 11:09:56 GMT by Matteo Pellegrini
Dear HMRC I am a UK tax resident since April 2008. I bought a foreign property in 2004 which I sold in 2022. I understand I am liable for capital gain here in the UK. I am after a few clarifications regarding how to calculate the gain: - When calculating the gain in Euros (the property was in Belgium), the gain adds up to to less than 100k EUR. When calculating in GBP equivalent (i.e., difference between sale price and purchase price and capital allowances at the exchange rate of the time) I end up with a £150k. As I see it, exchange rate differentials result in an additional gain and this strikes me as unfair. Can you please confirm that I need to convert the sale price, purchase price and deductible expenses at the exchange rate of the time they were incurred? Relatedly, can I not simply calculate the capital gain in Euros and apply the actual exchange rate of the time the gain was made (i.e. data of the sale price); - Are there any deductions/allowances that can be made for the period I owned the property and was not UK tax resident (i.e. 2004 to 2008)? Thanks 

Name removed admin. 
Posted Mon, 02 Oct 2023 10:30:48 GMT by HMRC Admin 32

You can apply any of the spot rates for the exchange rates for the tax years in which the property was purchased and sold. It must be done in sterling for all costs. You cannot just use the gain at the date of exchange. No deductions are due for the peroid 2004 to 2008 unless you paid for capital improvement to the property (eg new windows/kitchen).

Thank you.

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