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This tax year I received a very late payment on earnings relating to a period BEFORE I relocated to and became tax resident In the U.K.
The payment was taxed at source i.e. the country where I was resident when the payment was due, which is also the country where the income was earned.
Interest on the earnings was also paid to compensate for the delay in payment being made. Interest was also taxed at source.
1. How do I treat / disclose the payment in my tax filing?
2. Given earnings were taxed at source, are there any U.K. taxes due on the delayed payment of earnings, which although received while I was resident in the U.K., relates to earnings made PRIOR to my relocation to and tax residency in the U.K?
3. Given interest was taxed at source, are there any U.K. taxes due on the interest component of the payment as interest was accrued / calculated over a period, some of which being when I was tax resident in the U.K?
How are gains and losses to be computed on trades relating to Forex Contract for Difference in a USD denominated trading account?
For example if I opened up a 100,000 unit GBPUSD CFD position at 1.275 and then later closed that position at 1.375 resulting in a loss of 0.100 for each unit within the CFD contract i.e. a $10,000 gain on the transaction.
However, if I apply the prescribed HMRC gain/loss computation methodology and convert the cost basis to GBP at the time I opened the position...and proceeds to GBP at the time i closed the position, then I end up with GBP 0 in gains and losses. In fact all gains and losses on all GBP forex pair CFDs will be effectively nilled out.
Please advise om how to handle Forex CFD gains and losses?
Context: HMRC publishes "average" monthly and annual currency exchange rates, which it sources from the Financial Times for the purposes of foriegn income and capital gains / losses conversion to GBP. However, given I have a vast amount of trades during the year, some of which last a few days and were impacted by daily movements in currency exchange rates, it would be more appropriate to calculate forign income + capital gains & losses using daily currency exchange rates. Questions: As the HRMC does not provide a daily schedule and [Admin removed advertising] required a paid subscription for me to access histoical daily currency, may I use daily exchange rates from another source e.g.[Admin removed advertising]? Alternatively, is the HMRC able to provide daily exchange rates for the 2020/21 tax year? Or am I required to apply the average monthly exchange rate despite that number not being actual exchange rates when the transactions were effected?