The upcoming brexit referendum got me wondering about cross border trade during periods of large fx rate fluctuation.
Does the purchase of goods in a foreign currency count as a disposal of that currency?
Simple example:
22nd June - Purchase £10,000 (GBP) for €12,600.
23rd June - UK votes to remain in the EU; Sterling rate jumps to €1.50/£1.00.
24th June - Purchase fancy carbon fibre bicycle for £10,000 (now €15,000) inc. VAT.
Is that purchase considered a disposal for CGT purposes?
That is, has a gain of €2,400 been realised?
Does the purchase of goods in a foreign currency count as a disposal of that currency?
Simple example:
22nd June - Purchase £10,000 (GBP) for €12,600.
23rd June - UK votes to remain in the EU; Sterling rate jumps to €1.50/£1.00.
24th June - Purchase fancy carbon fibre bicycle for £10,000 (now €15,000) inc. VAT.
Is that purchase considered a disposal for CGT purposes?
That is, has a gain of €2,400 been realised?