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Posted Sun, 01 Sep 2024 08:02:46 GMT by Dvdci
Hello, I have question about CGT on foreign currency received as dividend and held in broker account. Namely, I own some shares which are traded in GBP but dividend is paid in USD. For dividend tax, my understanding is that I have to convert USD amount with FX rate on the date dividend is received to GBP and pay the tax on that amount. However, I don't convert USD dividend back to GBP on the same day I receive it and instead I leave it in USD and then convert to GBP from time to time. My question here is if I am subject to CGT on foreign currency in this case? I have read the rules stating that Foreign Currency Bank Accounts are not subject to CGT, however, it is a bit unclear if that also covers broker account and my case. The broker is Interactive Brokers UK. I don't trade foreign currencies and the sole purpose of FX conversion I do is to convert dividend back to GBP. Thank you
Posted Wed, 11 Sep 2024 12:07:32 GMT by HMRC Admin 20 Response
Hi,
It is the date that you receive the dividend that is used for tax purposes and the exchange rate on that date, not the date you actually convert the currency to sterling.  
Foreign currency is considered an asset and its disposal can give rise to a chargeable gain or allowable loss (CG78300 - Foreign currency: introduction).  
Under the terms of Self Assessment, we do not provide an official exchange rate and the onus is on the individual to use a just and reasonable exchange rate for each acquisition and disposal. For your convenience, there are exchange rates at Exchange rates from HMRC in CSV and XML format and for older rates at Exchange rates.
You are free to use any of the supplied rates or one of your own choosing. 
Thank you.

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