CGT query

O

odono24207

Registered User
Messages
2
I bought shares in US at end of 2004 for 10000 euro($13600). The share price remained flat so I sold the shares for more or less the same price in January 2006. However due to currency fluctuations when I transferred the $13600 back home it was worth 11500 euro.
1. Am I liable for capital gains tax?
2. If I had sold the shares but left the dollars in my US share A/C would I have been liable for cgt?
 
1. Yes. You will have to pay €1,500 (your chargeable gain) less €1,270 (your annual exemption – presuming not already utilised) *20% = €46. Payment due by 31st October 2006.

2. No. You would not have to pay CGT in this situation, as you would have not made a gain on disposal of the shares.
 
Thanks for that - where exactly in this 50+ page document should we be looking? (Not being facetious here, I'd just like to verify your claim).

Page 11 of the document says:

Where acquisitions and disposals are made in foreign currencies the relevant acquisition costs and relevant disposal proceeds should be converted to Euro at the date of acquisition and the date of disposal respectively. Refer to Example 8, Chapter 11, for a practical example of how to calculate a chargeable gain and tax payable where assets are acquired and disposed of in a foreign currency.

Perhaps I'm missing something, but I haven't seen anything about the gain not being recognisable until it's actually converted to our local currency, as your original post suggests. Can you point me in the right direction?

Thanks.
 
On page 6 point 4 "calculation of gain". However it does not mention conversion to the euro. But example 8 page 36 clearly indicates that in calcuation of the chargeable gain the cost of acquisition and the consideration on disposal must be converted to the local currency at the relevant dates. Makes the OP's second point a non-runner!
 
So the CGT (based on gain in euro value) MUST be paid whether he leaves the proceeds of the sale in dollars or not, then?
 
It will actually depend on the OP's residency and domicile status. Assuming that he/she is resident and domiciled in Ireland, then yes CGT is due once the gain is realised and does not depend on bringing the proceeds back to Ireland.
 
i think if he sold the shares in Jan2006 then the tax is due by 31st October 2007, rather than 2006.
 
Tenacious said:
Makes the OP's second point a non-runner!
Click to expand...

OK - so it appears that your advice above about not being liable for CGT if the money had been left in a US dollar account was incorrect, then. Or am I still missing something?
 
You must log in or register to reply here.
Back
Top