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.
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