Capital gains on assets bought and sold in a foreign currency

A reminder that while the pound trades at poor rates of exchange against both the dollar and the euro, it is possible to make a capital gain for UK tax purposes even if there is no gain or even a loss in the foreign currency.

For example, asset bought in on 31 March 2015 for €100,000 when the euro exchange rate was €1.38 = £1, would have a sterling cost of £72,464. If sold on 31 December 2016 for €100,000 the sterling equivalent would be £85,470 using an exchange rate of €1.17 = £1.

So no gain in local currency but a capital gain in the UK of £85,470 – £72,464 = £13,006.