Foreign capital gain

Hi MHRC team, I have disposals of share both overseas and UK. So when I file my tax return, I am confused as the Foreign note(for for Sa106) quote "capital gains from the disposal of overseas assets- use the ‘Capital Gains Tax summary’ pages". However, page 2 of "Capital Gain Tax Summary" (form Sa108) is already filled with UK disposals items. Where should I fill in the overseas disposals part? Thank you

Hi,

Your overseas gains calculation should be completed using pounds sterling.  

You will need to convert the purchase price and costs to pounds sterling, using the exchange rate at the time of purchase. You will also need to convert the disposal value and costs to pounds sterling, as well as any foreign tax paid. The official exchange rates can be found here:

Exchange rates from HMRC in CSV and XML format

The foreign gain is added to the UK gain and declared on SA108.  

In SA106, you would complete page F6, box 33 and boxes 37 to 40. Do not include these amounts in box 2 on page F1. You can then calculate the Foreign Tax Credit Relief and enter in box 2.

Thank you.

Very much appreciated your detailed answer, it solve my puzzle. Thank you.

Feedback . 

Could I ask that you expand on this answer please? "You will need to convert the purchase price and costs to pounds sterling, using the exchange rate at the time of purchase. You will also need to convert the disposal value and costs to pounds sterling" Presumably the sterling cost is calculated at the exchange rate at the time of purchase and then at the different rate for time of disposal? The gain will be the difference between the sterling value on sale less the sterling value at purchase? But what if there have been other capital transactions between the time of acquisition and sale. My US stockbroker shows on the statements the new capital costs allocated to holdings after a partial sale or a spinoff, merger etc. Do these need to be adjusted into sterling too? I have held many US stocks for long periods whilst non-resident and so the capital changes before becoming UK tax resident wouldn't be declarable in the UK. If I need to adjust for the exchange rates throughout then the actual sterling cost will change. A lot easier if I can just take the dollar figure for the cost as supplied by my stockbroker, use the exchange rate at the time of initial purchase and then the rate at time of disposal and ignore the effect of different exchange rates between these times. Is this approach acceptable to HMRC?

Hi Overseas Taxpayer,
You can use spot rates based on certain dates in the tax year if that is easier.
Please see:
Exchange rates from HMRC in CSV and XML format
Thank you. 
 

Can I just take the dollar figure for the cost as supplied by my stockbroker, use the exchange rate at the time of initial purchase and then the rate at time of disposal and ignore the effect of different exchange rates between these times?

Hi Overseas Taxpayer

All parts of the foreign capital gains calcultion must be in pounds sterling, using the exchange rate in place at the time of acquisition and disposal.  
It can be the daily closing rate as reported in national newspapers or the official exchange rates used by HMRC.  
You are free to use the monthly, annual avarage or the spot rate.  These can be found at The official exchange rates here
Exchange rates from HMRC in CSV and XML format.

Thank you

Many thanks for your reply. Just for the avoidance of any doubt can you please confirm that I have properly understood as I have a few demergers (spinoffs) to work through. The cost values are converted to sterling for the time of acquisition and then those sterling values are used for subsequent calculations of the cost. Only on disposal is a new conversion required in order to obtain the sterling value of the proceeds.

Hi,

Yes, that is correct.

Thank you.

Dear HMRC, many thanks for the answers above which already provide some clarifications. I am a UK tax resident but still hold some stocks and shares in Portugal (country of birth and nationality) via a Bank that I am looking to sell. During the selling process, the bank automatically withholds capital gains tax as if I were a Portuguese taxpayer. I would appreciate your advice on how should be dealt with legally and efficiently. Do I ask the Portuguese bank if they can refund the withheld tax given that I am not a Portuguese taxpayer, or does HMRC refund the withheld tax sum upon me declaring the foreign capital gains and overseas tax paid in my self-assessment form? I understand that there is a UK-Portugal tax treaty from 1969 meaning that I won't be taxed in the 2 countries for the same capital gains, is that correct? Many thanks

Hi Duarte,
You can claim Foreign Tax Credit Relief for the Portuguese tax paid to reduce the UK tax liability.
Guidance here:
Relief for Foreign Tax Paid 2023 (HS263) Updated 6 April 2023
Thank you. 

Hi, just looking to clarify. I have overseas shares in USA. 1 - how much capital gains am I allowed on these shares. 2 - if it falls under my PA do I still need to submit a self assessment? Thank you

Hi,
You are allowed £3000 before any tax is due - Capital Gains Tax: what you pay it on, rates and allowances
Thank you.