CFM10595 - Accounts in a currency other than sterling: capital gains

Calculation of capital gains in a foreign currency

This guidance applies for accounting periods beginning on or after 1st January 2005

Capital gains are calculated in sterling. The rules in FA93/S92A to 92E do not apply to capital gains, as capital gains are not calculated in accordance with generally accepted accounting practice.

Gains or losses on capital gains assets are calculated by translating into sterling

• the original cost of the asset using the spot exchange rate at the acquisition date,
• any improvement expenditure, acquisition or disposal expenses, at appropriate spot rates, and
• the disposal proceeds using the spot exchange rate at the date of disposal

The capital gain or loss is then calculated in the normal way using these sterling amounts.