FX Gains on USD denominated Shares in a GBP Account (UK)

[Kgrp74]

I don't understand how the currency gain plays out if you hold USD denominated shares since I should have a massive gain on my account given the fact it is a GBP account (and you dont allow us to hold multiple currencies like IBKR does)

[OfentseIG]

On 02/10/2022 at 13:32, Kgrp74 said:

I don't understand how the currency gain plays out if you hold USD denominated shares since I should have a massive gain on my account given the fact it is a GBP account (and you dont allow us to hold multiple currencies like IBKR does)

Hi @Kgrp74

Thank you for reaching out. 

HMRC rules don't allow you to hold foreign currency in an ISA, but you can still buy international shares.

The gains on currency conversions are only seen and credited in the account once you sell the shares if the currency rate is favorable to you. We also have to consider the 0.5% spread added to the exchange rate and commission charges which would normally offset your profits. 

Thanks, OfentseIG

[Kgrp74]

Ahh that's interesting - I suppose right now there may be some gain USD/GBP exchange rate. Also, regarding the holding of currencies. Is it possible to hold USD and others on the standard stocks and shares account on IG. I just ask because IBKR doesnt offer ISAs but you can FX trade and hold multiple currencies to purchase stock denominated in other currencies?

[OfentseIG]

1 hour ago, Kgrp74 said:

Ahh that's interesting - I suppose right now there may be some gain USD/GBP exchange rate. Also, regarding the holding of currencies. Is it possible to hold USD and others on the standard stocks and shares account on IG. I just ask because IBKR doesnt offer ISAs but you can FX trade and hold multiple currencies to purchase stock denominated in other currencies?

Hi @Kgrp74

Yes you can. You can hold different currencies in the Share dealing account. Note for multi-currency accounts: The commission trading fees shown on the website apply to clients who opt for the default setting of 'instant currency conversion'. Clients who choose to convert currencies manually will pay commission of 2 cents per share with a minimum charge of $15 on US stocks. Changing your currency conversion settings influences the amount of commission you pay. All the best, OfentseIG