Currency gains CGT liable?

[irishguy]

I purchased shares denominated in USD a number of years ago and since then the USD to EUR has appreciated more than 30% (+ the share price increase) am I liable for the currency gain as well as the the gain in the underlying share.

Also I have a number of shares and investment policies over the years I have lost money on, can of offset these losses against these gains? If so how would I do this?

 

[Gordon Gekko]

Yes. In your case, you'll calculate your gain on the shares in Euro so the currency aspect will be captured.

e.g. bought for $100 when that was €70, sold for $200 when that is €180, gain is €110.

The share losses should be offsettable against the gain. Investment policies typically aren't, but each investment should be looked at individually as it depends.

 

[dublin66]

The rules for non-Euro asset in that you convert your purchase price to Eur at date of purchase using the exchange rate on that date. The sale price is the Euro equivalent of your US$ at date of sale. Subtract purchase proceeds (plus cost of purchase) from sales proceeds (subtract costs of sale such as brokerage etc) from and your the balance is your gain.

The calculation is not your profit in dollars converted at today's exchange rate.

 

[roker]

Can I add a question to this, I have a monthly UK pension paid in to a UK bank, that has increased in the last year if I transfer it to Euros, I was thinking of taking the monthly average conversion for the tax year, is this OK?

 

[dublin66]

Yes this should be okay. The Revenue (from Central Bank figures) publish average annual exchange rates that may be used. The important thing from a Revenue viewpoint is that a consistent method is used and not using different methods that give you the best result for a given figure.

In theory when you convert into Euro you should be doing the same calculation as I outlined above. The average cost for the year would be the average exchange rate. However in practice this may not be required and, in most instances, I doubt if it is ever done for a pension. The gains may not be significant.