Can I invest foreign currency in UK products without converting to GBP?

26 October 2021

Question by Stef

Hi! I own some money in cash in foreign currencies (USD and CHF) totalling approx. £25,000. This money is currently sitting in a UK bank account with 0% interest rate. I'd like to invest this money without having to convert it to GBP first. I'd be willing to consider a stocks & shares ISA as well as other options. Is this possible and what's the best way of doing this?

Answered by Boring Money

Unfortunately, under HMRC rules, they do not allow you to hold foreign currency in an ISA. However, you can purchase international shares within a Stocks & Shares ISA wrapper which will be subject to currency conversions when the transactions occur.

It’s also worth noting that each tax year you can only contribute up to £20,000 across ISA products. If you wanted to maximise your ISA allowance for this tax year you would need to convert £20,000 of your foreign currency holdings into GBP and then contribute this into a Stocks & Shares ISA.

You can use a Self-Invested Personal Pension (SIPP) to hold foreign currency and make international trades in different currencies. This will be dependent on individual providers and there may be restrictions on which type of currencies can be held within the product wrapper.

Due to the specialist nature of this query, I would recommend that you seek advice before proceeding with any decision and most likely an adviser with specific knowledge of investing foreign currency in the UK.

Answered by

Boring Money