Accounts

Accounts represent the different real world accounts that you have and impact the tax calculations in the ways described below. Beyond that, the main practical purpose of the accounts is that the balance calculation tool creates separate balances for each account, which allows you to compare the actual balances of those accounts to the balances in the system.

Broker

A broker represents a real world broker account/financial institution that you have an account with. The main purpose of the broker is to control the currency holding type, which will be inherited by all accounts on the broker.

Broker Currency Holding Type

The two currency holding types control whether currency assets are chargeable to tax as currency held in the form of a simple debt (e.g. in a bank account) is not chargeable to tax (see CG78320 for more information). The effect of this as follows:

• Simple Debt: Non-sterling currencies are not chargeable in any account on the broker and buying or selling the currency will not lead to a disposal or acquisition. No implicit disposals or acquisition will be created for non-sterling currencies.
• Debt: Non-sterling currencies are chargeable to tax in any account on the broker and disposals and acquisitions will be created when they are disposed or acquired. This includes implicit disposals (such as paying a fee in a non-sterling currency) or acquisitions (such as receiving a dividend in a non-sterling currency).

How your currency is held in a given account is a complex question. It may be useful to generate a tax report for each holding type and compare the result.

Account

Each account represents an individual account at a broker and inherits the currency holding type of the broker. The tax country of the account is only used to set the tax source country of any broker interest (where it's not set explicitly on an individual transaction).