January 11, 2017 | No Comments
The recent devaluation of the pound isn’t all bad news if you own foreign assets that you purchased when the pound was at a high. Selling them now could make you a bigger profit than you might have expected a few months ago.
However, gains resulting from currency fluctuations are subject to capital gains tax, with a few exceptions.
All gains must be declared on your tax return in sterling, regardless of what currency they were transacted in, as they must be assessed for capital gains tax.
For example, in 2005 you purchased a property in the USA for $200,000 and used £109,000 sterling to make the purchase. You now want to sell the property which is worth $250,000 or £200,000 sterling – a gain of around 46%. Great news, but please remember that you must pay tax on the 46% profit made in sterling.
As ever, if you have any queries, please do contact Michael Burgess on 01782 279615.