Foreign Currency - practical considerations with returns
The computations required in connection with foreign currency can in certain circumstances be complex and time consuming. In addition the position can be further complicated by the absence of certain key information.
On occasion there may be issues in obtaining the necessary information where investment managers use several currencies and neither calculate the currency gains or losses on changes of investments nor provide sufficient information for the taxpayer to be able to calculate the gains and losses. There can also be issues with certain types of less mainstream investments where reports from investment managers just provide the foreign currency gain with no information available about acquisition costs or sales proceeds so that the appropriate computations can be completed.
Where there are issues with the provision of information and it is not possible to complete the return in strict accordance with UK tax principles, then appropriate white space disclosure should be made setting down the basis on which the figures have been prepared given the lack of information.
The tax return guide should be considered in connection with the inclusion of provisional or estimated figures within a return.