How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TaxRobin Your Own Question
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17641
Experience:  International tax
Type Your Tax Question Here...
TaxRobin is online now

If shares are purchased in US dollars and the money reinvested

This answer was rated:

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?
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?

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.
TaxRobin and other Tax Specialists are ready to help you