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Fundamental change to foreign exchange gains from 6 April 2012

From 6 April 2012 foreign currency gains or losses made by individuals, trustees and personal representatives on the withdrawal of funds from foreign bank accounts are exempt for capital gains tax purposes.

Generally speaking, this is welcome news for taxpayers and their advisers since:

1. •

   gains on foreign currency accounts will not be taxed, and

2. •

   the complexities of the previous regime have been swept away

However, if there is a loss on foreign currency, then there is no relief for that loss.

See Example 1.

Rules for tax years up to and including 2011/12

The remainder of this guidance note discusses the position in tax years 6 April 2008 to 5 April 2012.

For the purposes