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Where Taxpayers and Advisers Meet

Tax treatment of foreign currency investments....

andyc456
Posts:20
Joined:Thu Jul 02, 2015 1:59 pm
Tax treatment of foreign currency investments....

Postby andyc456 » Sun May 08, 2022 5:28 am

Assume I exchange £100,000 for US$ 125,000 of actual currency in my UK brokerage account on 1 June 2022, when GPB/USD FX rate is 1.25

Six months later I buy US$ 125,000 of SPY ETF (dollar denominated) when the £ / $ FX rate is 1.00. So at the time of SPY ETF purchase my investment translates into £125,000 (a £ 25,000 currency gain).

Is the £ 25,000 currency gain realized or unrealized at the time I bought the SPY ETF for UK tax purposes? Must I report the gain?

Many thanks to anyone who can explain how this works.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Tax treatment of foreign currency investments....

Postby bd6759 » Sun May 08, 2022 3:28 pm

Liable to capital gain tax


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