How to Document Currency Conversions for Irish Capital Gains Tax Reporting
Introduction
When you buy or sell an overseas asset – a house in Spain, shares on the NYSE, or a crypto token – the profit or loss is measured in the foreign currency of that transaction.
For Irish tax purposes, however, Capital Gains Tax (CGT) must be calculated in euros.
Getting the conversion right is essential. A mistake can lead to an understated gain (and a penalty) or an overstated one (and you pay tax you don’t owe). This article shows you exactly how to document currency conversions so that your CGT return (Form CG1 or Form 11) meets Revenue’s requirements.
Key take‑away: Keep a clear paper or digital trail of the exchange rate used for both the acquisition and the disposal of every foreign‑currency asset. Revenue expects the rate to be a recognised market rate on the relevant date.
1. Why Currency Conversions Matter for CGT
1.1 Legal basis
- Section 28 Income Tax Act 1997 – CGT is charged on the chargeable gain realised on the disposal of an asset.
- Section 532 – Any currency other than the euro is itself an asset for CGT purposes.
- Part 19‑01‑14a (Revenue Technical Note) – Gains or losses on foreign currency that arise otherwise than in the course of a trade are treated as CGT events.
1.2 What the Revenue eBrief No. 082/23 (27 March 2023) confirms
- Use a recognised market exchange rate on the date of acquisition and the date of disposal.
- The rate may be taken from:
- The European Central Bank (ECB) daily reference rates, or
- The Irish Central Statistics Office (CSO) foreign exchange tables, or
- Any other widely published rate that is readily available to the public on that day.
If you use a different rate (e.g., a bank’s internal rate for a one‑off transaction), you must be able to show that the rate is fair and reasonable and that it was applied consistently.
2. The Core Documentation Checklist
| Item | What to keep | Where to store it |
|---|---|---|
| Purchase contract / invoice | Date, description, amount in foreign currency, any transaction costs (stamp duty, broker fees, etc.) | Physical file or scanned PDF |
| Exchange rate on acquisition date | ECB/CSO daily rate (or other published source) – note the source and URL | Screenshot or printed table |
| Sale contract / disposal statement | Date, proceeds in foreign currency, costs of sale (commission, legal fees) | Physical file or scanned PDF |
| Exchange rate on disposal date | Same source type as above, captured on the disposal date | Screenshot or printed table |
| Currency conversion calculations | Spreadsheet showing: 1. Original cost × acquisition rate = € cost 2. Sale proceeds × disposal rate = € proceeds 3. Adjusted for costs = Net € gain/loss |
Excel/Google Sheets (keep a copy on your computer and a backup) |
| Supporting evidence of the rate | Copy of the ECB/CSO table for the exact day (or a reputable news site) | PDF attachment to the spreadsheet |
| Declaration on CGT return | Totals transferred to Form CG1 (or the capital gains section of Form 11) | Keep a copy of the completed tax return |
Tip: Revenue’s eBrief states that a single source (e.g., ECB) should be used for all transactions in a given tax year to avoid inconsistencies.
3. Step‑by‑Step: Converting a Real‑World Example
You bought a Dublin‑based holiday home in Portugal for €250,000 on 15 June 2019, paying the price in euros. You later sold a French stock portfolio on 20 Oct 2023 for USD 45,000. Let’s see how to document the foreign‑currency part.
3.1 Identify the disposal currency
The sale is denominated in USD – the foreign currency.
3.2 Get the disposal exchange rate
- Go to the ECB reference rates page (https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html).
- Find the rate for 20 Oct 2023: 1 EUR = 1.0895 USD (or 1 USD = 0.9179 EUR).
- Record the rate and the URL in your spreadsheet.
3.3 Convert the proceeds
Proceeds in EUR = USD 45,000 × 0.9179 = €41,306 (rounded to the nearest euro).
3.4 Subtract disposal costs
Assume a broker fee of USD 500 (≈ €459).
Net proceeds = €41,306 – €459 = €40,847.
3.5 Determine the original cost in EUR
If the original purchase of the French shares was made on 10 Jan 2020 for USD 30,000:
- Acquisition rate (10 Jan 2020) = 1 USD = 0.9025 EUR.
- Cost in EUR = USD 30,000 × 0.9025 = €27,075.
3.6 Calculate the chargeable gain
Chargeable gain = €40,847 – €27,075 = €13,772.
3.7 Record everything
| Date | Description | Currency | Amount | Exchange rate (EUR per unit) | € amount |
|---|---|---|---|---|---|
| 10 Jan 2020 | Purchase of French shares | USD | 30,000 | 0.9025 | €27,075 |
| 20 Oct 2023 | Sale of French shares | USD | 45,000 | 0.9179 | €41,306 |
| 20 Oct 2023 | Broker fee | USD | 500 | 0.9179 | €459 |
| Net proceeds | €40,847 | ||||
| Gain | €13,772 |
Attach the ECB rate tables (or screenshots) for 10 Jan 2020 and 20 Oct 2023 to the spreadsheet.
3.8 Transfer to the CGT return
- Enter €13,772 in the “Disposal of assets” section of Form CG1 (or the capital gains part of Form 11).
- Apply the annual CGT exemption (€1,270 per individual for 2024/25). The taxable amount becomes €12,502.
4. Practical Tips for Irish Expats
| Situation | How to handle the conversion |
|---|---|
| Multiple foreign currencies (e.g., USD, GBP, AUD) | Keep a separate worksheet for each currency but use the same source (ECB) for consistency. |
| Bank provides a “FX rate” on the transaction statement | Verify that the bank’s rate matches the ECB/CSO rate for that day. If it differs by a small margin (≤ 0.5 %), you may use it, but keep a note explaining the choice. |
| Cryptocurrency (BTC, ETH, etc.) | First convert the crypto to a fiat currency (usually USD) using the exchange’s published rate on the trade date, then convert that fiat to EUR using the ECB rate for the same day. |
| Inheritance of foreign assets | Use the market value on the date of death (converted at the ECB rate of that date) as the acquisition cost. |
| Losses in foreign currency | Same method – calculate the loss in EUR. Losses can be offset against other gains in the same year, and any excess can be carried forward. |
| Small‑scale disposals (below €1,000) | Still required to keep records; the annual exemption does not apply to individual disposals, only to the total gain. |
| Self‑assessment software | Most Irish tax software (e.g., Taxback.com, BOS, TurboTax Ireland) allows you to enter the foreign‑currency amount and the exchange rate; the program will calculate the € figure automatically. Keep the source rate handy for audit purposes. |
5. Common Pitfalls & How to Avoid Them
| Pitfall | Consequence | Remedy |
|---|---|---|
| Using the wrong date for the rate (e.g., settlement date instead of trade date) | Revenue may deem the gain inaccurate, leading to a penalty. | Always use the date the transaction legally occurs – the trade date for shares, the contract date for property. |
| Rounding inconsistently (e.g., rounding the rate to 4 dp in one case, 2 dp in another) | Small discrepancies can add up across many transactions. | Adopt a standard rounding rule (e.g., 5 dp for rates, nearest euro for amounts) and apply it uniformly. |
| Failing to include transaction costs (stamp duty, broker fees) | Overstated gain, higher tax bill. | Record all ancillary costs in the same currency as the transaction, convert them using the same rate, and deduct from the proceeds. |
| Not keeping the source of the exchange rate | Auditors may request proof; you could be unable to justify the rate. | Save a screenshot or PDF of the ECB/CSO table for each date; include the URL and date in your spreadsheet notes. |
| Mixing rates from different sources (ECB for some, bank for others) | Inconsistent methodology may raise questions. | Choose one primary source (ECB recommended) and stick with it for the whole tax year. |
6. Reporting the Gain on Your CGT Return
- Calculate the total net gain in euros for all disposals during the tax year (including foreign‑currency assets).
- Deduct the annual exemption (€1,270 per person for 2024/25).
- Apply any carried‑forward losses from previous years.
- Enter the final figure on the “Disposals of assets” section of Form CG1 (or the equivalent section of Form 11 for self‑assessment).
- Attach a summary of your calculations (the spreadsheet) if you are filing a paper return; for online filing, keep the file ready in case Revenue requests it later.
Deadline reminder: CGT returns are due 31 October (paper) or 31 December (online) following the end of the tax year (31 December).
7. Tools & Resources
| Resource | What it offers |
|---|---|
| European Central Bank – Reference Exchange Rates | Daily EUR‑based rates for most major currencies. |
| CSO – Foreign Exchange Rates | Irish‑specific tables, downloadable CSV. |
| Revenue Part 19‑01‑14a PDF | Technical guidance on foreign‑currency CGT events. |
| Revenue eBrief No. 082/23 | Latest clarification on using market rates. |
| Tax‑back.com CGT calculator | Quick conversion and exemption handling. |
| Microsoft Excel / Google Sheets | Build a reusable template for all foreign‑currency disposals. |
Conclusion
For Irish residents and expats, the rule is simple: convert every foreign‑currency acquisition and disposal at a recognised market rate on the exact date of the transaction, and keep a clear paper trail. By following the checklist, using a consistent source like the ECB, and recording all costs, you’ll satisfy Revenue’s requirements and avoid costly mistakes.
Take a few minutes now to set up a spreadsheet template and start gathering the exchange‑rate screenshots for your most recent transactions. When tax time arrives, you’ll be ready to file a clean, compliant CGT return – and keep more of your hard‑earned gains where they belong: in your pocket.