tax on foreign exchange

I brought Hong Kong Dollar(HKD) from Interactive Broker using GBP £1000 and then sold the same amount of GBP £1000 back to Hong Kong Dollar. There is a gain of HKD 100. Yet if I use GBP in calculation for both transaction, there is no gain or loss. Do I need to report the apparent gain of HKD 100?

Sorry I wrote the wrong question. the question should be: I brought GBP £1000 from Interactive Broker using using Hong Kong Dollar and then sold the same amount of GBP £1000 back to Hong Kong Dollar. There is a gain of HKD 100. Yet if I use GBP in calculation for both transaction, there is no gain or loss. Do I need to report the apparent gain of HKD 100? 

Hi,

Provided the exchange of currency was for personal expenditure, then the guidance regarding no chargeable gain and no allowable losses would apply, 

CG78315 - Foreign currency: personal expenditure of individuals

Thank you.

Hi PY Leung,
For detailed guidance on the tax implications of currency exchange transactions, please refer to CG78300.  
CG78300 - Foreign currency: introduction

Thank you. 

I am a BNO visa holder and entered UK in end March 2023. Many years ago I bought foreign currencies such as CAD, Euro, New Zealand Dollars, etc for travelling and I still keep them in saving accounts overseas. I receive interests from them each month. I will be a UK tax resident in this Sept after staying here for more than 183 days. (1) If I sell all foreign currencies before Sept this year, do I need to report the gain/losses of selling them? My problem is: I did not remember when they were bought and the exchange rates concerned. (2) If I continue to keep the foreign currencies after being a UK tax resident, I only need to report to HMRC the interests earned as long as I do not sell them ? Am I right?

Hi L lyluk2023
If you are claiming split year, you will only report any foreign income in the UK period.
You would need to get details from the valuation department of the country in which you resided at the tim of purchase and the exchage rate at the time.
If you dont sell them then yes you only need to report the interest.
Thankyou.

Thanks a lot for Admin 10's explanation. Could you please explain further on the following? 1) I have done UK Statutory Residence Test and found that I am a non-UK tax resident before end Sept 2023. Do you mean: as long as I am in the UK, I need to report the gain/loss of selling foreign currencies disregarding whether I have been in UK for more than 183 days? What does 'claiming split year' mean? 2) There is no valuation department which can offer the details on the exchange rate concerned. To simplify the calculation of gain/loss, may I assume I bought the foreign currencies in the lowest exchange rates, say, in the past 10 years and use them to calculate the gains/loss of selling them in the UK? If not, do you have any other suggestions? I just want to sell them all to save the troubles of reporting the interests earned each years. Thanks a lot for your attention!

Hi,

If you qualify for split year then you only report any foreign income for the UK part of the year.

RDRM12000 - Residence: The SRT: Split year treatment

If you do not qualify then you will need to report all your foreign income to the UK.

Tax on foreign income

The guidance at RDRM12150 at GOV.UK will help you work out if split year treatment applies. 

Thank you.