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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I'm native german living in Edinburgh since 1.1.2014 paying

Resolved Question:

I'm native german living in Edinburgh since 1.1.2014 paying taxes in the UK. For the tax year 2014/2015 I had some stocks and company bonds in German. In general this is taxed in Germany at the source. As I had some looses from the past I got interest and capital gain full paid out. I'm now unsure how to declare this in the UK now.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

As a general rule, a UK resident for UK tax purposes pays tax on all income and gains arising worldwide. If there is tax suffered on this income or gains in another country, then you claim foreign tax credit relief against tax suffered under double tax treaty.

You would declare the net gain after offsetting tax losses on supplementary pages SA106 - Foreign.

Notes that help you fill in Foreign pages of your tax return can be found here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/420047/sa106-notes-2015.pdf

There are also guidance notes on Pages 43-44 of RDR1 here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/427602/RDR1_gov_uk_hyperlinks_0_3_7078500.pdf

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Hello,

thanks for your reply and reference to the Foreign Notes. This is very helpfull. Unfortunately my problem is slightly more complex.

Let's assume that I have sold 2 stocks at the same time. One with a loss and one with a gain. Taxed at source i had to pay capital gain tax in Germany on the one with a gain but as at the same time there is a loss as long the loss is higher then the gain it would be calculated against. So at the end there will be no deduction.

In addition interest from corporate bonds had been calculated against stock losses too.

The question is now how HMRC will treat this / how to flag this....

Would be great to get some additional information on that. Thx for your help in advance.

Thx Frank

Expert:  taxadvisor.uk replied 2 years ago.
Frank, thank you for your reply.

Lets separate the two...

CGT
You net off gains against losses in the same year and report net gains or losses on your tax return. If in your UK tax return, it results in no gain there is no CGT payable. Any tax suffered in Germany is not available as a relief against UK tax as the tax here would be zero.

Interest on corporate bonds.
These are chargeable to income tax in the UK and you can't offset these against capital losses, I'm afraid.

I hope this is helpful.
Customer: replied 2 years ago.

...very helpfull. I see light at the end of the tunnel. Just to be sure as I'm not a native speaker/writer let me rephrase it.

>CGT
>>You net off gains against losses in the same year and report net >gains or losses on your tax return. If in your UK tax return, it results in >no gain there is no CGT payable. Any tax suffered in Germany is not >available as a relief against UK tax as the tax here would be zero.

Calculate Capital Gains against Loss of the same UK tax year (shifted 3 month against the german) is fine. That is great.

>Interest on corporate bonds.
>These are chargeable to income tax in the UK and you can't offset >these against capital losses, I'm afraid.

Interest and Capital Gain could not be calculated against each other. Not great but it is as it is. So have to check what had been taxed explicit at source and not calculated against Loss on CG.

If you could just be so kind and confirm/correct if needed. Thx again for your help.

Thx Frank

Expert:  taxadvisor.uk replied 2 years ago.
Frank, thank you for your reply.

I can confirm your understanding is correct.

I hope this is helpful.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.