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I have posted about this some years ago but as more investors have gone into foreign markets I will bring it up again.

According to SARS, if you exchanged Rands to USD and invested in any foreign market then all your calculations must be in USD. Your gain or loss must however be converted to Rands only AFTER the calculation.

This can make a huge difference so be careful. Here is an example and please correct me if I had a brain fart.

If the FX rate was R16 and you bought R160k worth of ACME shares then you will have $10k worth of shares.
Now 3 years later you sell when the share has increased in value to $10 300. but the Rand has strengthened to R12. Then;

Calculation 1. (As required by SARS)

Purchase Cost: $10 000.00
Proceeds:         $10 300.00
Gain:               $     300.00

Now you convert to Rand. $300 x 12 = R3 600.00
Your gain for SARS is R3 600.00.

Calculation 2. (your actual loss- yes - loss)

Purchase Cost ( in Rands): R160 000.00
Proceeds in Rands:            R123 600.00 (12 x 10 300 )
Loss:                                R 36 400.00

A huge difference as SARS does not allow currency movements in foreign investments.

Will do the same calculation with the opposite scenario tomorrow to see if Patricks post holds.

So this is the opposite of what most people thought and P is correct.

Can you check the link, I get a 404.

Some forum members here are resident overseas as I am so must warn them that the SA tax system may not apply to them.

In my case with my investments in SA I cannot use the "Calculation 1" as all transactions must be first be converted to Euros before the Capital Gain/Loss is calculated. This method will include the FX movement.

This allows me to reset my Base Cost should the ZAR tank back to 16 or 17. I would sell all and repurchase them and this would give me a Capital Loss and a new higher Base Cost going forward even if in ZAR terms I made a gain.

Portugal has a 1 year holding for CGT where SA has a 3 year term.