How much did I pay in £s for my o/seas house

2nonexperthousebuyer

I'm a UK tax payer and bought an overseas house 10 years ago. I intend to sell it this year so will have to inform to UK tax man.
The tax form asks for buying and selling prices in UK£, but the exchange rate changes so I have a problem saying how much I paid for it.


When I bought it, the rate was £1=$2. The price was $400k (£200k) but I bought it with a 50% interest only foreign mortgage.
So I sent £100k overseas.


Five years later I decided to pay-off the remaining $200k mortgage but because the rate was £1=$1.5 that cost me £133k.


So, how much did I pay for the house - £200k or £233K?


Assuming I sell it for $420k and assuming the rate is £1=$1.3, that would give a sale value of £323k.


Will I have to pay CGT on £323k less £200k, or on £323 less £233K?




PS I have been paying overseas and UK income tax on the rental receipts but have no idea what I will have to pay on the capital. I want to do this correctly.

agrinnall

I would guess that you paid £233K, although I think HMRC will want you to be more precise with the exchange rates than 1:2 and 1:1.5, you'll probably need to refer to the transfer records to get the exact rates, or historical spot rates for the dates when the transfers were made. Don't forget that you'll pay CGT on the difference minus your CGT allowance (currently £11000).

pyueck

agrinnall wrote: »

I would guess that you paid £233K, although I think HMRC will want you to be more precise with the exchange rates than 1:2 and 1:1.5, you'll probably need to refer to the transfer records to get the exact rates, or historical spot rates for the dates when the transfers were made. Don't forget that you'll pay CGT on the difference minus your CGT allowance (currently £11000).

The timings of the transfers of the money are irrelevant.

The rules are simple.

Proceeds of sale translated in GBP at rate of date of sale

less

Cost at purchase translated into GBP at rate at date of purchase

equals capital gain.

pinkteapot

You bought it for £200k.

How you paid (cash or mortgage) and when you decided to pay the mortgage off has no relevance.