HMRC "Nudge" Letter for Foreign Income and Degiro

AustinZ

(Someone private message me about Degiro, so I sent them the reply below. I added it here in case it's useful to someone else...)

Hi,

Yes, it is a big mess, firstly you need to call HMRC and ask them what total numbers they have received from Degiro - this is important, so you can consolidate the numbers. They receive two numbers, one from Degiro another from Money Market Fund Company that Degiro used to work with - I think it is changed recently but that was how the HRMC told me last Nov 2022. This was regarding 2021/2022 tax year.

The HMRC was very good and cooperative, I thought they just say we don't tell you, you tell us what you did not declare....!!! But the opposite, they told me exact details and numbers...

Also need to call or email Degiro, ask them to send you their calculation and listing of all items used in the calculation, the listing is very important with dates, you can use this to consolidate your own calculation.

Then from Degiro website export all your transactions into a spreadsheet, for a year before and after... (see below why).

At the end you will finally find out that every time you Sold a share the amount is added and reported as disposal of asset. However, every time you Bought a share it is also considered as the money that exited from Money Market Fund, so it is also added and reported as disposal of asset !!!? Really stupid but that is the main problem - ALL sold and bought are added and reported together...

Now another important thing is you need to understand that Degiro reports these total numbers to HMRC for calendar year, not from 5 April UK tax year, another issue to take into account (Euro states have calendar tax year. unlike UK !).

I consolidated all this and made a few spreadsheets and send to HMRC. I also realized I had not reported total disposal of asset (only SOLD stocks that is) in previous year as it was over 4 times Capital Gain allowance. I thought if my Capital Gain is below threshold then no tax and no need to report even if total disposal is above that, but we have to do this. So I corrected that on my Self Assessment of previous year, although no new tax was due, just reporting...

After all this I called HMRC, I emailed them all the stuff as they gave me an email address, easier to email spreadsheets. But I had to call many times, because nobody picked these emails, but they finally added all this to my account as attachment.

The last time I called a nice lady said I can see your emails and documents now attached to your account. So I explained the whole thing in simple terms and the mess Degiro does in reporting. I said you can read all the docs and spreadsheets, she then said no need (!?), I understand and accept your explanation, and now mark your account as RESOLVED....!!! So that was the end of it.... (I got the feeling they already knew about this Degiro issue but never said anything).

Hope you get the same result... 

Regards,

wmb194

Thanks for that. Net net, don't use De Giro.

Imartin

Hey @AustinZ , sorry to bother, I hope you are doing well. I was just looking at this as I also used DeGIRO and was very confused. Do you need to take into account the Money Market Funds transactions to report the disposals?

As if I do not do that, I won't need to report it, but if include them, then the disposals are 4x the allowance, so I will need to report even if the income was within the tax allowance.

Thank you very much!

GeoffTF

wmb194 said:

Thanks for that. Net net, don't use De Giro.

I have no desire to use De Giro, but I think the moral is to track everything carefully and do your own CGT calculations. It goes without saying that you have to know the tax rules too.