Capital gains tax and subtracting cost

[Westy29]

I made two share disposals this year and there was a currency conversion charge involved. I'm wondering at what stage that should be subtracted.

For example lets say I made a net gain )after currency conversion charge and cost of buying shares) of 5000 euro.

The currency conversions charge is 200 euro

Which calculation is correct. Is the charge taken off before or after?

5000 - 200 -1270 (exemption) = 3530 x 33% =1165 (CGT payable)

0R

5000-1270 (exemption) =3730 x 33% = 1231 -200 = 1031 (CGT Payable)

 

[jpd]

You have to calculate the cost of buying and the proceeds of selling the shares in euro using the exchange rates at the time of sale including the fees associated with the exchange conversion

You do not account for the fees separately

 

[dub_nerd]

For example lets say I made a net gain )after currency conversion charge and cost of buying shares) of 5000 euro. The currency conversions charge is 200 euro. Which calculation is correct. Is the charge taken off before or after?

5000 - 200 -1270 (exemption) = 3530 x 33% =1165 (CGT payable)

0R

5000-1270 (exemption) =3730 x 33% = 1231 -200 = 1031 (CGT Payable)

Neither is correct. You said your net gain after currency conversion charges was 5000 euro. But then why are you subtracting the currency conversion charge for a second time? You pay tax on your net gain less the exemption. The calculation should simply be: (5000 - 1270) x 33% = 1231.

 

[Westy29]

Sorry its not my net gain....its my net proceeds of the sale after the currency conversion charge has been applied.

The currency conversion is done as per the exchange rate of the day and then a currency conversion charge is applied.

I am assuming I can subtract this charge from my gains before working out my tax liability?

 

[dub_nerd]

Sorry its not my net gain....its my net proceeds of the sale after the currency conversion charge has been applied.

The currency conversion is done as per the exchange rate of the day and then a currency conversion charge is applied.

I am assuming I can subtract this charge from my gains before working out my tax liability?

I'm still at a loss. You're saying it's your "net proceeds after the currency conversion charge has been applied". Then you want to subtract the currency conversion charge again. How does that make sense?

 

[Westy29]

I'm still at a loss. You're saying it's your "net proceeds after the currency conversion charge has been applied". Then you want to subtract the currency conversion charge again. How does that make sense?

AS an example.

10000 shares originally costing 1000 euro
Sold 10000 shares at 1.15 dollar each = 11500 dollars
11500 dollars converted by broker at the currency exchange rate they gave me 1 euro = 1.15 dollar therefore 11500 dollars =10000 euro

10000 euro is then reduced by an extra charge (called a currency conversion charge) of 500 euro leaving me with 9500 euro

9500- 1000 (cost) -1270-(allowance) = 7230 (chargeable gain)

The currency conversion charge is a charge, added extra, nothing to do with the exchange rate. As this is a cost of selling the shares can I also take this off my chargeable gain before calculating my CGT due?

 

[jpd]

Yes. The sale proceeds are 9,500 euro - the currency conversion is rolled into the costs associated with the sale - fees, commissions, etc etc

 

[dub_nerd]

10000 euro is then reduced by an extra charge (called a currency conversion charge) of 500 euro leaving me with 9500 euro

9500- 1000 (cost) -1270-(allowance) = 7230 (chargeable gain)

The currency conversion charge is a charge, added extra, nothing to do with the exchange rate. As this is a cost of selling the shares can I also take this off my chargeable gain before calculating my CGT due?

I'll have to give up as I am lost. As with all your previous examples, you already subtracted the conversion charge in the calculation above, why are you talking about subtracting it again? If you are asking "I already subtracted the conversion charge in the calculation, is that ok?" then the answer is yes -- anything that is part of the transaction fees is allowable, but not ongoing fees like account maintenance etc.