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 system stores all valuations/foreign exchange rates in the valuations section. A single valuation is stored for each asset for each day that a valuation is required and the same exchange rate is used for all conversions required on that day (except where a transaction derived valuation is used as described below).

The system uses the European Central Bank (ECB) Reference rates for exchange rates where possible, which has data for major currencies from 1999 and is updated every business day.

Valuations Section

The valuations section contains a list of all of the valuations used by the system. Each time you add or edit a transaction, the system will calculate what valuations it needs and create any new valuations as required (likewise, unused valuations without user data are deleted when no longer required).

Each valuation contains two dates:

• For Date: the date the valuation is used to convert values on
• Valuation Date: the date the valuation exchange rate was taken from. Usually this will be the same as the For Date, but sometimes there is no data available in the ECB database for a given date (for example, if the country of the currency had a bank holiday or on a weekend). In this case, the exchange rate is taken from the most recent valuation date before the For Date.

You can also override the exchange rate used and you can do this by editing any given valuation. This override value will be used in place of the ECB valuation for all transactions. The user note is optional and is for your own reference only.

It is also possible to add or import data into the system before a valuation is available. In this case, the most recent valuation before the For Date will be used, but the valuation will be marked as provisional, signalled by a tilde (~) in front of the value (including in parts of the system outside the valuations section). The database is updated overnight and when the new valuation becomes available, the provisional valuations will be updated and the tilde will be removed.

Valuation Hierarchy

There is an exception to using the valuations data for the tax calculations as mentioned above and this is when a valuation can be derived from a transaction. An example for this would be if you trade a foreign currency for sterling, then we can directly calculate the exchange rate from this transaction and we use that.

Valuations are used in the following order:

1. If the valuation can be derived from the transaction, then we use that valuation.
2. If a user override valuation exists for the required date, then we use that valuation.
3. We use the ECB valuation for the required date.