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Posted Sat, 26 Feb 2022 17:02:34 GMT by ELEL
Hello, I got from some forums that FX cost is not deductible against profit in calculating CGT. I tried to search this information in HMRC web pages but couldn’t find it. Can you please confirm this and direct me to the HMRC web page that mentions this point? If your confirmation is positive, I will appreciate it if you can enlighten me the rationale behind this. I have a UK trading account in GBP. When I buy a US stock, the broker converts my money from GBP to USD at spot rate, charges me the FX conversion fee and then buy the US stock. When I sell the US stock, the broker sells the stock, converts the USD to GBP at spot rate and charge me the FX conversion fee. From my point of view, the FX conversion fee is a legitimate and necessary cost for me to buy/sell a US stock. The FX cost is not large, but I need to make sure that I calculate my GCT correctly, and if possible, understand why some necessary cost cannot be deducted against profit. Thank you.
Posted Mon, 07 Mar 2022 15:41:07 GMT by HMRC Admin 17

Hi,
 
The currency conversion fees when buying or disposing of a foreign asset are not allowable expenses.

The relevant guidance is at:

Capital Gains Manual    .

Thank you.

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