CG78333 - Currency: identification of disposals with acquisitions

There are often large numbers of transactions on bank accounts. It can be a formidable task to compute gains or losses on numerous withdrawals. Provided the practice is followed consistently and produces a reasonable overall result, you may accept that a net figure for deposits and withdrawals be computed for each calendar month or part month within a tax year or accounting period. To find the acquisition costs and disposal proceeds, each monthly deposit or withdrawal thus computed should be converted into sterling at the average rate of exchange for the month; any reasonable method of arriving at this average is acceptable, again provided it is followed consistently. Identification and indexation apply in the normal way for the purpose of computing the gains on the withdrawals.

NOTE. If a taxpayer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. For indexation allowance see CG17207+ and for taper relief see CG17895+.