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Posted Thu, 16 Mar 2023 06:16:35 GMT by John Smith
Hello I returned to UK after over 10 years overseas. For 2022/23 I shall be reporting split-year from 1 January 2023 What is the cost basis rule for shares purchased before return to UK, and sold after my return ? Should they be placed in a 'section 104 pool' or are these shares sold on a first in first out basis ? For example 100 shares company A purchased 1 August 2022 for equivalent of UKP 1,000, then 100 shares company A purchased 1 October for UKP 800. On selling 100 shares in March 2023 (now UK resident) is the cost basis UKP 1,000 (FIFO) or UKP 900 (pooling basis) ? Thank you for any help.
Posted Wed, 22 Mar 2023 15:20:16 GMT by HMRC Admin 5

I regret that we are unable to comment on examples.  Income tax and gains are charged on the arising basis.  

Where foreign share are involved any gains or losses must be calculated using pounds sterling only.  If you sell the shares while you are resident in the UK, the they may be subject to UK captial gains.  

You would need to workout the purchase costs in pounds sterling, using the official exchange rate in place at the time of purchase.  You would also need to work out the disposal value and costs and convert to pounds sterling.  

To convert from a foreign currency to pounds sterling, please use the official rate of exchange at the time of the exchange.  

You are free to use the yearly rate, the monthly rate or the spot rate.  

If a conversion was undertaken to deposit the money into a UK bank account, then this figure can be used.  

The official exchange rates can be found here Exchange rates from HMRC in CSV and XML format and here Exchange rates

The supplementary page SA106 must be completed using pounds sterling only, when reporting the gains /losses on a self assessment tax return.

Thank you.

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