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  • Is FX cost deductible against profit in calculating CGT?

    Hello, I got from some forums that FX cost is not deductible against profit in calculating CGT. I tried to search this information in HMRC web pages but couldn’t find it. Can you please confirm this and direct me to the HMRC web page that mentions this point? If your confirmation is positive, I will appreciate it if you can enlighten me the rationale behind this. I have a UK trading account in GBP. When I buy a US stock, the broker converts my money from GBP to USD at spot rate, charges me the FX conversion fee and then buy the US stock. When I sell the US stock, the broker sells the stock, converts the USD to GBP at spot rate and charge me the FX conversion fee. From my point of view, the FX conversion fee is a legitimate and necessary cost for me to buy/sell a US stock. The FX cost is not large, but I need to make sure that I calculate my GCT correctly, and if possible, understand why some necessary cost cannot be deducted against profit. Thank you.
  • RE: How foreign dividend tax before 2016 is calculated?

    Hello, Thanks for the reply. I fully understood that "Foreign dividends are charged to tax under UK rules". This is not my query. You mentioned that "these rules would also apply for foreign dividends prior to 2016". This is in fact is the key part of my query in my previous message. I am not sure whether I understand the meaning of "these rules" in your answer correctly. In the HMRC webpage: https://www.gov.uk/tax-on-dividends/previous-tax-years , It says that before 2016 tax year, the “effective dividend tax rate” for Basic Rate tax band is 0%. Your reply states that "these rules would also apply for foreign dividends prior to 2016". Do you mean that the rule “effective dividend tax rate” for Basic Rate tax band is 0% would also apply for foreign dividend before 2016? I will appreciate it if you can explicitly confirm this point. Thank you.
  • How foreign dividend tax before 2016 is calculated?

    Hello, In the HMRC webpage: https://www.gov.uk/tax-on-dividends/previous-tax-years It says that before 2016 tax year, the “effective dividend tax rate” for Basic Rate tax band is 0%. Does it also apply for dividends received from foreign listed companies? If not, can you please advise how the dividend tax is calculated for foreign dividend received before 2016 for basic rate tax band? Thank you.
  • RE: How can I calculate the pool of actual cost of my Section 104 Holding for foreign stock?

    Thanks for the suggestion. The bank can provide the statements of the last 7 years. With this, I can then have the number of shares in my S104 holding at the beginning of the previous 7th year. What I need to estimate is the cost (or purchase prices) of this S104 holding at that moment. The shares were bought and then sold a lot of times so many years ago that there is no easy or good way to do the estimation. Can I use the mid-point market price (i.e. the average of year-max and year-min) of the previous 8th year and use it as the cost of my S104 holding at the beginning of the previous 7th year? I understand that there is no best estimation method but is this method acceptable? If not, I will appreciate it if you can provide some guidelines or examples of acceptable estimation methods. Thank you.
  • RE: How to calculate the value of the stock/shares I gave my spouse

    Thanks a lot for the reply. I understand how to calculate the cost of shares disposal. What I am not sure is in fact whether my wife’s acquisition price will be affected by my buy/sell activities after I have given the shares to her. Your reply “Your wife's acquisition price will be the same as yours” doesn’t mention the timing. My acquisition price depends on my buy/sell activities and the date I sell my shares. Can you please confirm whether my wife’s acquisition price (based on the standard shares disposal calculation, including the same day and 30 days rules) be LOCKED on the day of ownership transferred and would not be affected by the later change of my acquisition price of my own holding? I believe it should be LOCKED. If not, the calculation would then be very complicated. However, I am not sure. Your conformation will be very much appreciated. Thank you.
  • RE: How can I calculate the pool of actual cost of my Section 104 Holding for foreign stock?

    Thanks again for your reply. It is easy to get historical stock prices from internet. However, I don’t have all the records of the dates that I bought them. I do not need to keep old trading records because the place I lived before I became a UK resident does not charge CGT on stocks trading. I checked with the bank and they can only provide the statements of the last 7 years. A lot of my current stocks holding were bought more than 7 years ago. Can you please advise how I, as a new UK resident, can calculate the cost of my S104 holding for those stocks I bought more than 7 years ago? Thank you.
  • How to calculate the value of the stock/shares I gave my spouse

    As per the HMRC webpage: https://www.gov.uk/capital-gains-tax/gifts If my spouse sells the asset that was given by me as a gift, my spouse needs to pay tax on any gain. The HMRC webpage also says that “Their gain will be calculated on the difference in value between when you first owned the asset and when they disposed of it.” How can I calculate the value “when I first owned the asset” if the asset is stock/shares? Should the normal stock/shares disposal method (i.e. firstly shares acquired on the same day, then shares acquired in the following 30 days and then the shares in the S104 holding) be used (i.e. as if I sold the shares on the day I gave them to my spouse)? If not, can you please point me to the related documentation? Thank you.
  • RE: How can I calculate the pool of actual cost of my Section 104 Holding for foreign stock?

    Thanks a lot for the reply. My question is in fact more on whether there is special procedure for a new UK Resident in calculating the S104 holding for those shares owned before becoming a UK resident. I read the web pages of the links in your reply and read the other related pages in the Capital Gain Manual again. I found no mentioning of whether the S104 holding calculation would be different for a new UK Resident. So, I believe that the calculation method is the same no matter you are a new or existing UK Resident. My follow up question is then: How one, as a new UK resident, can calculate the S014 holding for those shares he/she owned for more than 7 years but without the buy/sell records older than 7 years ? Thank you.
  • How can I calculate the pool of actual cost of my Section 104 Holding for foreign stock?

    Before I became a UK resident, I own a non-UK (or foreign) stock for more than 20 years and did more than 100 buy/sell transactions. When I became a UK resident, I owned, say, 1000 shares of that stock. I need to work out the pool of actual cost of the Section 104 Holding of that 1000 shares before I can calculate my CGT liability. How can I do the calculation? Should I follow the example shown in HMRC website by starting from the first share I owned (i.e. more than 20 years ago that I don’t have proof other than my won EXCEL worksheet), calculating the pool of actual cost after each buy/sell (more than 100 transactions) and then working out the pool of the actual cost of that 1000 shares when I became a UK resident? Or, can I use the cost of the latest 1000 shares I bought and treat it as the pool of actual cost of my Section 104 Holding as a start? Thank you.