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Foreign exchange rate on exercise of options

Foreign exchange rate on exercise of options

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This may seem a trivial question but I can not find clear guidance on HMRC. 

A UK client working for a US based company exercised his (unapproved) share options last September and paid for them in dollars from his UK bank account. He has not yet sold the shares.

To calculate the income tax charge, and the base cost for CGT, is it acceptable to use the exchange rate shown on his bank statement at the date of exercise? 

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By NDH
08th May 2014 17:08

I would say that is entirely reasonable because that is the actual amount paid and the actual exchange rate used.

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By Chipette
09th May 2014 09:21

Thank you very much for your answer.

 

I have another question: would the bank charges for this transaction be included in the cost of the shares for CGT purposes?

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