Foreign income for

Dear Admin, I asked you: "Will I be able to claim for foreign tax credit relief even if the tax paid relates to a slightly different period due to the difference in counting the months in the tax year of these two countries? (Poland - the tax year is the calendar year) , UK - the tax year is counted from April of the previous year to April of the next year) " You replied: "You would need to apportion the tax paid in Poland to coincide with the tax year for the UK." And later you explained: "You would take the amount of tax paid in e.g 2020 and apportion this to 9/12 of the amount for 20/21 year and 4/12 for 19/20 year." My question, to understand clearly your answer is now: I understand that 9/12 (from April to December) of the tax paid in Poland for 2020 (tax year in Poland = calendar year) should be related to the tax year 20/21 in the UK, but I do not understand why 4/12 AND NOT 3/12 (from January to March) of this tax I should refer to the 19/20 tax year in the UK. After all, a year is twelve, not thirteen months. Is it your mistake or did you write it on purpose? And if you wrote it deliberately, please explain it to me, because I don't understand why 4/12 and not 3/12. Thank you in advance for your answer.

Hi,
 

Sincere apologies for the confusion, this should have read 3/12.

Thank you.

Dear Admin, I asked you: "Will I be able to claim for foreign tax credit relief even if the tax paid relates to a slightly different period due to the difference in counting the months in the tax year of these two countries? (Poland - the tax year is the calendar year), UK - the tax year is counted from April of the previous year to April of the next year) " You replied: "You would take the amount of tax paid in e.g 2020 and apportion this to 9/12 of the amount for 20/21 year and 4/12 for 19/20 year." My question, to understand clearly your answer is now: But if I report to the HMRC my income (capital gains) for 2020/21 and I want to claim FTCR, I only know the tax I paid in Poland for the calendar year 2020. I can claim 9/12 of this tax for this year. The problem is only with 3/12 of the tax for the calendar year 2021, because I will know about the tax amount for 2021 only in mid-February 2022. Then I will receive a document in Poland about the amount of income earned and therefore the tax to be paid for 2021. However, the tax report and therefore my wish to claim the FTCR to HMRC should be submitted by the end of January 2022. Do you have any practical solution to this problem? Thank you in advance for your answer.

Hi Czarek, 
Under the circumstances you describe, it would be acceptable to include a reasonable estimate of the 'unknown'  3/12 element when calculating your total FTCR figure for 2020/21 (and enter an explanatory freehand note in the 'any other information' box in your tax return).
If the estimated FTCR you have claimed turns out to be inaccurate, you can amend your tax return to claim the actual FTCR due.
Thank you

Dear Admin, The HMRC website says: "Reporting losses Claim for your loss by including it on your tax return. [...] You do not have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset. " If, for example, I had a loss in the tax year 2021-2022 and I did not have a profit this year that could be reduced by this loss, should I report it in my Self Assessment for this tax year so that I can deduct it later from possible profit in the next 4 years, if such profits will be? Thank you in advance for your answer.

Hi
If you normally complete a return then it is best to enter this on at the time rather than have to then write in at a later date.
Once it has been reported it is available until required.
The 4 year time limit is only for reporting the loss, not for using it. 
Thankyou.
Regards.

Dear Admin, The HMRC website says: "You do not have to report losses straight away - YOU CAN CLAIM UP TO 4 YEARS after the end of the tax year that you disposed of the asset." You wrote in the previous post: "THE 4 YEAR TIME IS ONLY FOR REPORTING THE LOSS, not for using it." Personally, I understand the above sentence from the HMRC website so that I have losses to use within 4 years, but what I understand from your statement is that I have 4 years to report losses for which there is no time limit for their subsequent use. Could you dispel my dilemma, because these statements are completely different in my understanding? Thank you in advance for your answer.

Hi
We ask you to report losses within the 4 years.
Claims to amend Tax Returns can date back to the previous 4 years.
Therefore this is why we ask you to report it on the self assessment form if you using losses from previous tax years against your income. 
Thankyou.
Regards.

Dear Admin, I have a question regarding the rounding rules for reporting foreign dividends and foreign capital gains from the sale of shares on the stock exchange at the pound rate on the transaction date. 1.How should I round the dividend amounts on form SA106, page F2, if the dividend amount is: a) £ 5,532.896 b) £ 5,532.427 2. When calculating the profits and losses on the sale of shares of the same company and of the same type in a given tax year, I obtain the following results, for example: GAINS: 1) £ 203.4332 2) £ 5,322.521 LOSSES: 1) £ 203.4332 2) £ 5,322.521 Do I round off at this stage, and if so, according to what rules? If possible give me an example on the numbers above. However, if I round the numbers only after summing up the profits and losses separately to enter them in the form SA108 on page CG2 and CG3, how do I round the obtained numbers? I am giving examples for individual boxes from these pages: BOXES (SA108 CG2 - Listed shares and securities): 24 Disposal proceeds - How should I round £ 2,265.444 or round when it is £ 2,265.522 ? 25 Allowable costs (including purchase price) - How should I round £ 2,265.444 and how should I round £ 2,265.522 ? 26 Gains in the year, before losses - how should I round £ 2,265.444 and how should I round when it is £ 2,265.522 ? 27 Losses in the year - How should I round £ 2,265.444 and how should I round when it is £ 2,265.522 ? 29 Total gains or losses on the disposal of an asset of this type reported on Real Time Transaction returns - How should I round £ 2,265.444 and how should I round £ 2,265.522 ? (SA108 CG3 Losses and adjustments) - BOXES 45-48 and 51 - How should I round £ 2,265.444 and how do I round when it is £ 2,265.522 ? Thank you in advance for your answer.

Hi,
 

You should round the income figures up/down to the pound.  You should round down income figures and round up tax paid figures and losses figures.  Basically you round the figures to your advantage.  Thank you.

I have a question regarding the "Capital Gains Tax summary" form (SA 108, 2021 year), page CG 2 (Listed shares and securities). In box 25 I have to enter "Allowable costs (including purchase price)". Does this amount, apart from the share purchase price and the share purchase commission, also include the share sale commission, which is also my expense?

Dear Admin, Do I also need to include my gain and loss calculations on the Capital Gains Tax summary (SA 108) form by completing pages CGN 11 and CGN 12 (included in the Capital Gains Tax summary notes) for each share sale? Thank you in advance for your answer.

Hi Czarek,

Amounts paid to an agent to sell the shares is an allowable expense:

CG15250 - Expenditure: incidental costs of acquisition and disposal

Thank you.

Hi Czarek,

You will need a separate computation (or working sheet for simple calculations) for each asset or type of asset you sold or disposed of. 

Thank you.

Dear Admin, You wrote: "You will need a separate computation (or working sheet for simple calculations) for each asset or type of asset you sold or disposed of." Do I have to do this on the forms provided on pages CGN 11 and CGN 12? Thank you in advance for your answer.

Dear Admin, You've written: "You will need a separate computation (or working sheet for simple calculations) for each asset or type of asset you sold or disposed of." If I do not need to fill in my calculations on pages CGN 11 and CGN 12, can I present them in a separate note as follows? For example: 1. SELL: 3000 ATENDE on 17/11/2021 at £ 0.86168 gives GAIN of £ 719.76 Matches with: BUY: SECTION 104 HOLDING. 3000 ATENDE shares of 3000 bought at average price of £ 0.61854 CALCULATION: Gain = £ 719.76 = (3000 * 0.86168 - 9.67) - (3000 * 0.61854) 2.SELL: 271 ONDE on 27/12/2021 at £ 3.0326 gives LOSS of £ 56.90 Matches with: BUY: 13/01/2022, 271 ONDE shares of 353 bought at £ 3.2182 CALCULATION: Loss = £ 56.90 = (271 * 3.0326 - 3.20) - (353 * 3.2182 + 4.43) * (271/353) 3.SELL: 1400 DEVELIA on 23/12/2021 at £ 0.38753 gives LOSS of £ 5.92 SAME DAY TRADE matches with: BUY: 1400 shares of 1400 at price £ 0.38873 CALCULATION: LOSS = £ 5.92 = (1400 * 0.38753 - 2.11582) - (1400 * 0.38873 + 2.12182) Do I understand correctly that I should include this note in my Foreign Capital Gains Self-Assessment Tax Return report? Thank you in advance for your answer.

Hi,

Yes, enter the details of each disposal on CGN11 and CGN12.

Thank you.

Dear Admin, You've written: "[...] enter the details of each disposal on CGN11 and CGN12." Question : On pages CGN 11 and CGN 12 there is a request to enter the date of purchase of assets (in my case, shares) in boxes (Date of acquisition DD MM YYYY). What should I do (put in boxes) if I have sold an asset that was purchased on different days and I have not sold all the shares of the same type, but only some of them? Thank you in advance for your answer.

Dear Admin, In form SA108 on the CG2 website (Listed shares and securities) there is box 29 - "Total gains or losses on the disposal of an asset of this type reported on Real Time Transaction returns". In the annotation to this box, I can read: "If you’ve disposed of listed shares or securities and included this when you used the 'real time' Capital Gains Tax service, put the overall gain or loss in the box." I don't really understand the terms "Real Time Transaction return" and " 'Real time' Capital Gains Tax service". Could you explain them more to me? Do they apply to my case (sale of shares on a foreign stock exchange), and if so, how? Thank you in advance for your answer.

Hi,
 

After reviewing your question in more detail you cannot use the the CGT worksheet is you make a part disposal - All the shares in the Section 104 holding are regarded as indistinguishable parts of a single asset which grows or shrinks as shares are acquired or disposed of. You would need to provide details of computations either as an attachment or in the appropriate white space box accompanying the capital gains section on the return. You would need to provide the date of disposal – the consideration for the disposal – · the allowable expenditure – · the date of acquisition (which will be dependant on the share identification rules).  Thank you.