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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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If shares are purchased in US dollars and the money reinvested

Resolved Question:

If shares are purchased in US dollars and the money reinvested in dollars without converting back to pounds, how would capital gains tax be calculated? Is tax payable on profit reinvested and not sold within the same year or does this count as assets?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
If shares are purchased with US dollars the pound conversion would still need to be used when reporting the sell. You would need to convert the value when reporting the gain or loss on the sell.
When the calculation was made the conversion value would be used to see if a gain was made.
Customer: replied 3 years ago.

Therefore, is tax just payable on the individual sale of shares during the tax year and not on profit reinvested?

Expert:  TaxRobin replied 3 years ago.
Yes, the shares sold would be the taxable event. If dividends are involved then that portion is taxable. Where you have asked for a cash dividend payable to be used to purchase further shares (most commonly under the terms of a 'dividend reinvestment plan'), the cash value of the dividend is taxable.
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