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South African capital gains - UK tax

How to treat for UK CGT

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Hi 

A  new client sold 2 properties in South Africa, one in Oct 18 and one on 1st April 19, so both fall within UK tax year... but

South African tax year runs from 1st March to 28/29 Feb. So the property sold on 1st April 2019 has not yet been taxed for CGT in South Africa.

UK CGT for first property is being calculated using HMRC's average exchange rates and a Foreign tax credit being claimed for the CGT already paid in South Africa on that property.

What do I do with the second property, which falls in UK tax year 2018-19, but has not yet been taxed in South Africa, so we dont know the CGT paid there and hence to be claimed as FTC in UK.

Would it be allowed to account for that second property in next tax year when we know its foreign tax position?

Or shall we get an estimate of tax payable in South Africa and use that estimate to claim FTC?

Any suggestions on how to go about this please.?

Thanks in advance

Replies (5)

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Psycho
By Wilson Philips
18th Dec 2019 07:17

Why are you using average rates? The appropriate rates are the spot rates at time of transaction, ie purchase and sale.

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Replying to Wilson Philips:
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By Newb121
18th Dec 2019 08:27

Thanks Wilson

What do say about about the second sale? Which year to include that?

Thanks

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Replying to Newb121:
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By Wanderer
18th Dec 2019 09:30

2018-2019.

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Replying to Wanderer:
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By Newb121
18th Dec 2019 09:58

Wanderer wrote:

2018-2019.


Thanks, and for the foreign tax credit amount? Do we get an estimated tax bill to be paid in South Africa and use that figure?
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Replying to Newb121:
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By Wanderer
18th Dec 2019 10:03

I'd probably estimate with some white space disclosure then amend when I have an accurate figure. Not 100% sure this is correct but is a practical approach.

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