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Posted Sat, 08 Jul 2023 09:06:59 GMT by Sixto Olson
I sold some stocks in my home country and need to do my capital gains calculations. Over the years the stocks payed stock dividends, these were offered with of choice of taking cash or shares. I took the shares and reported the equivalent cash value as part of my income in previous tax years. Can I substract this from my capital gains calculations? Otherwise it would be double taxed. What is the correct way of doing the calculation?
Posted Fri, 14 Jul 2023 08:32:30 GMT by HMRC Admin 20
Hi Sixto Olson,

No.  Capital gains tax and income tax are two separate taxes that never mix.  
The dividends paid each year, were treated as income and taxed as income.  
Disposing of the shares can create a capital gain subject to capital gains tax or a capital gains loss.  
You will need to convert all parts of the capital gains calculation into pounds sterling, using the exchange rate in force
at the time the shares were purchased and sold.  
The official exchange rate can be found at Exchange rates from HMRC in CSV and XML format.  
Archived exchange rates can be found at Foreign exchange rates and spot rates: 1 January 1989 to 31 March 2009

Thank you.
Posted Mon, 17 Jul 2023 11:47:32 GMT by Sixto Olson
There used to be a page CG58763 that explained how to do the computations, but it has disappeared now. Instead there is a link to "... A shareholder who takes such a stock dividend receives not only an income receipt but also a capital asset in the form of shares. It is necessary to establish the Capital Gains Tax base cost of the shares." The investor is receiving shares which are declared as income for the year, but they also add to his Capital. If the value is not subtracted when the shares are sold, they will be double taxed.

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