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Valuations

All transactions in a foreign currency must be converted to sterling for tax purposes at the time the transaction took place and any gains or losses must be calculated using the converted values. You cannot calculate the gain in another currency and then convert the gain to sterling.

The Valuations page controls how ShareCalc values assets in sterling. It has three sections, described below.

Automatic FX Rates

The automatic exchange rate source can be selected here. The choices are European Central Bank (ECB) reference rates, which provide daily business-day rates from 1999 (exact coverage varies for each currency), and HMRC monthly exchange rates, which provide one rate for each calendar month from January 2015. The selection is saved with the document. See Reference Data for coverage and matching limitations.

ECB rates are downloaded and kept up to date by the application. Where there is no ECB rate for a date (for example a weekend or bank holiday), the most recent earlier rate is used. HMRC rates are included with the application. If there is no HMRC rate for the month of a transaction, the transaction is excluded from the calculation until you add a custom valuation.

Custom Valuations

Custom valuations are values that you enter yourself. Each one has an asset, a date, a GBP per unit value and an optional note for your own reference. A custom valuation is used in place of the automatic rate for that asset on that date. They are used for:

  • Overriding the automatic exchange rate for a currency on a given date.
  • Providing a rate for a currency that is not covered by the selected automatic source.
  • Providing the sterling market value per unit of a non-currency asset where the calculation needs one. This is required for spin offs and capital distributions. If the valuation is missing, the transaction is excluded from the calculation and the Tax Issues panel offers an Add Valuation fix.

Custom valuations can be added, edited and deleted from this section.

Valuations Used in Tax Calculation

This section lists the automatic and custom valuations used by the most recent tax calculation, with the source of each (ECB, HMRC or User). It is for information only and is updated each time the tax calculation runs.

A valuation is marked as Pending when there is no confirmed rate for its date yet and the most recent available rate has been used instead. This happens when a transaction is dated after the latest published ECB rate. The valuation updates automatically once the ECB publishes a newer rate. HMRC rates are never pending.

Valuation Hierarchy

Where a sterling value can be derived from a trade, it is used to value the asset and consideration/proceeds instead of the rates above. Any fees, tax and accrued income always use the standard valuations (ECB/HMRC/User) and not the rate derived from the trade.

For example:

  • If you buy or sell a foreign currency for sterling, the exchange rate is taken directly from the transaction.
  • If your broker converted currency as part of a transaction, the transaction itself uses the standard rates. The broker's conversion rate is only used for the disposal or acquisition of the converted currency, which only arises when the currency is chargeable.

Values are used in the following order:

  1. A value derived from the transaction, where available and applicable.
  2. A custom valuation for the asset and date.
  3. The selected automatic ECB or HMRC rate.