Permanently UK resident/UK domicile client inherited some money in Australia 13 years ago; built a house in Australia with the money, rented it out (declaring the income in the UK) and has just sold the property.
Based on AUS $ she made a loss of AUS $ 5,000 so no taxes to pay in Australia
However when we calculate the transaction in Pounds Sterling using the exchange rates prevailing at date of purchase and date of sale the transaction shows a gain of almost £40,000 because of the fall in value of the pound against the AUS $.
My understanding is that this is the way the gain has to be calculated for her UK tax return. Unless I am missing something or there is some way round it?