Is a CGT profit/loss incurred even though one has a currency hedge via a loan?

Hi HMRC, If one invests in USD stocks and is able to borrow the required USD amount from the broker to avoid currency risk, does one need to declare FX gains or losses which never occurred or just the actual Profit/Loss when repaying the loan? Eg * One borrows 100.000 USD to buy 100.000 of USD stock * FX is GBPUSD=1 at the time of the loan * When the trade is sold, the USD stock has not moved but the FX has changed drastically, eg GBPUSD=2 --- Calculation 1 --- The real economics of the transaction is that in the example above, on the sale of the 100.000 USD worth of stock, I would just repay the 100.000 USD load to the broker and I would have 0 Profit or Loss, as the loan was created as an hedge to avoid the currency fluctuations. --- Calculation 2 --- Talking to another trader he mentioned that as I borrowed 100.000 USD when GBP.USD was 1, when I sell the stock and GBPUSD is at 2, in "theoretical" terms I'll be getting 50.000GBP only due to the currency fluctuation and it doesn't matter if I'll just repay the full 100.000 USD loan to the broker, but from the point of view of HMRC and CGT calculation, I could have a 50.000GBP loss. Is this calculation correct? --- Doubt --- As mentioned, in reality, I've not had either a profit or loss (as I'll just repay the full USD loan), so didn't understand if it's true that HMRC allows you to have such a big loss in this case, even though it never occurred? Could you pls let me know if Calculation 1 or 2 above is the correct one to report these cases? Thank you

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