📊 Investing in stock market

Okay, I hope you’re bearing with me for this. Sorry for the somewhat long post.

The numbers in the following spreadsheet are just for the sake of the argument. They aren’t real USD/GBP rates or realistic stock prices.

Here’s what’s going on. In this example, the investor buys stocks for 1000 USD two times over the year. In January and in June. And then he sells everything in December. The stock price went up. And the currency exchange rate stayed the same. This is very simple and straightforward. The return of investment is identical for USD and GBP investors.

In the second table, I am introducing a changing FX rate. The price for GBP also went up here, and it reduces the effective gain for the GBP investor while the USD investor makes a better profit. That’s also not very difficult, that just shows why investments in foreign currencies have that additional FX rate risk.

Accounts in foreign currencies aren’t a new thing in investment. But why might it be interesting for an investor to do that?

So, lets say the investor from example 2 isn’t exchanging back the USD into GBP in December because he doesn’t want to reduce his profit due to the “bad” rate. But he uses the USD in his trading account to buy a different stock for further investing.

So what do you do now. Maybe a year later, he sells that again and the GBP rate this time is in his favor. How should that final calculation look like? Are you going to apply the GBP/USD rate at the time in December when you actually didn’t buy or sell any USD at all? What if he would let the money sit a litte maybe until May before reinvesting? Would you apply the GBP/USD rate at the time of reinvestment even if you didn’t buy USD at that time?

As long as you’re not buying back GBP with your USD, you haven’t realized your gains. Or have you? And this is where national regulations might vary. But whatever applies in your case: you need to at least track the FX rate at the time of reinvestment (in December or May) to know the value in GBP you’ve reinvested. If you don’t, how can you calculate your final profit in a currency that isn’t USD?

And this gets very complex very soon when you’re investing in various stocks, when you’re not selling all shares of a given stock but chunks and if you’re then reinvesting that money in chucks again.

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You don’t pay another capital gains tax on the appreciation of the currency, it will be included in the x% you pay for gains( if there are ) when you sell, in our country for example the value of the currency you calculate the tax it will be the national bank rate for that currency on the date you sell. If you play with unstable currencies of course you risk to lose money because they can depreciate/appreciate fast

You mention selling price. But what about buying?

Technically, we’re looking at two transactions, GBP —> USD and then USD —> shares. And then the other way around when cashing in. Pretty simple to calculate gains.

But what when you sell your stocks, but not the currency? When you let the USD sit and sell them back after a while? I would be surprised if this capital gain isn’t taxable income when it’s substantial enough. It is, after all, a forex deal. But let’s put that aside for the sake of the argument.

Let’s look at the other case instead, where the investor keeps the USD, pays his taxes on the capital gain from his first investment but decides to invest again.

What your last explanation doesn’t specify is how you would calculate your gains in that case. In all your explanations, you seem to assume that currency exchange and stock transactions happen always in conjunction.

To clarify:

Scenario 1

An investor buys shares in January. FX rate is 1. Here is how it looks:
1000 GBP —> 1000 USD —> 10 shares. Share price is 100 USD.

After 1 year, the share price went up to 200 USD. The investor sells everything and the FX rate became 1.2 in the meantime. So selling the stocks would give him 2000 USD. Due to FX rate change, that would result in 2400 GBP. Total gain would be 1400 GBP. Easy.

Scenario 2:

After 1 year, the investor sells the 10 shares, ends up with 2000 USD. But doesn’t exchange into GBP. No gain from currency exchange yet. You could assume that the deal became taxable already and you would apply the FX rate at the date of the sell, and you would end up with the same 1400 GBP here so far. Still easy.

The investor lets the 2000 USD untouched for a couple months. In the meantime, the FX rate changes another time. It was 1.2 after a year, and is 1.5 now. Now he’s investing again. He still has his 2000 USD in his trading account. His investment looks like this:
2000 USD —> 10 stocks. Stock price 200 USD.

After another year, the stock price went up to 300 USD. The investor sells everything, ends up with 3000 USD on his trading account. In the meantime, the FX rate is 1.7, which altogether results in 5100 GBP.

Now, to determine his gains for the second investment in GBP, which GBP rate at the moment of buying the second time does he have to apply? Since the investor hasn’t exchanged his 2000 USD back to GBP: did he invest 2400 GBP (FX 1.2) or did he invest 3000 GBP (FX 1.5) when he bought 10 stocks for 200 USD?

Now what is his gain for the second investment?

5100 GBP - 2400 GBP
5100 GBP - 3000 GBP

If the investor wouldn’t have kept the USD, it would be straightforward. He would have bought the 2000 USD for 3000 GBP. Straightforward.

But since he had them already and got them earlier for a different price, there’s a gain from FX fluctuations in addition.

So let’s say your assumption is true that you can ignore that for tax reasons here. With Revolut, you still would have to track the FX rates. And this is what I am talking about when I say it adds complexity that comes with trading accounts in foreign currencies. So in either case, if FX gains are taxable or not, you would have to look at which rate would be applicable at the moment of making the second investment. This particular information would not be available to you in the app, because you didn’t make this transaction where you buy the 2000 USD in the first place.

(You’re right with your initial statement that Revolut’s T&C restrict forex trading. But that does not apply here. The USD trading account is separate from Revolut’s FX platform. Usually, there’s a limit to which tax authorities don’t want capital gain tax for currency exchanges, like when you’re first buying and then selling currencies for vacations but maintaining an investment account is usually a different story.)

You are not trading currencies, you are trading stocks, the only tax is on capital gains

Well, I don’t believe this is true when you’re setting up a USD trading account. And this is what happens here. You can’t invest EUR or GBP with Revolut. You need to buy USD first. This doesn’t matter as long as you’re not keeping a balance in your trading account, but it does when you do.

But whatever the case. Assuming you’re right, it would be even more important to figure out manually the FX rate at the moment of buying stocks. If you wouldn’t, you would calculate your gains based on the wrong rate at the moment of buying in consecutive trades. You could end up paying more taxes. Again more work and complexity compared to a trading account in you local currency.

I am intrigued though. Maybe I am missing something. Could you do a quick sample calculation maybe?

Assuming the investor lives in the UK, he would have to fill out the tax form in GBP. This is how I would calculate this:

  • Investing: 1000 GBP, stock price 100 USD, FX rate 1
  • Selling: stock price 150 USD, FX rate 1.2

1500 USD = 1800 GBP
Taxable gain 800 GBP

You’ve said earlier the rate at the moment of selling is relevant, right? So we should be on the same page here.

And then you’re saying also that FX gains aren’t taxed. How can both statements be true?

When the FX rate at the moment of selling is applicable, FX gains are simply factored in. FX gains are taxed, just not separately. (If FX rate gains wouldn’t be taxable, the rate at the moment of buying would be applicable. The taxable gain here would be 500 instead of 800 GBP.)

I am aware that this is not what you meant, but I think this is an important point. So one question remains: when keeping USD in the trading account from an earlier investment for consecutive investments, which USD/GBP rate would you apply in that scenario to calculate your capital gains in GBP? The rate at the time you acquired the dollars, or the rate at the time you bought shares, even if there was not a GBP to USD transaction involved at this time, because you had already dollars in your account from that earlier investment. But you need to pic one, without an amount in GBP to begin with, you simply can’t find out what you’ve gained.

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The problem with Revolut trading has limited stocks. Would certainly agree on these stocks to be added. Also:

All these above are very popular. I love trading with Revolut, as I can move cash to Crypto currencies and as well as sending monies and withdrawing cash abroad when needed all in one roof.

P.S. I still can’t start new topics on my account. Al though system says I could 2 weeks ago.


Scenario: one decides to start trading in 2020 with 1000$ top-up which will be invested/reinvested with multiple sells and buys. On the 31st of december all funds available (no metter gain or loss) are invested in stocks…so, fiscally talking will you consider 1000$ loss for the 2020 considering that all funds available are still invested at the end of the year? So as long as all your funds are invested when the year shifts you are continously on loss untill you decide to sell all and withdraw at the end of some year? Is this correct?

I don’t think so. Investments aren’t losses. They are unrealized losses or profits.

It’s not trivial, and my assumption is that this varies between countries. But here is how it works where I live.


When you reinvest immediately after selling stocks, you could argue that you could ignore currency gains. You would have to tally up all profits and losses over the year from all stock transactions, applying the EUR/USD rate (or whichever rate is relevant depending on your country). Let’s say I made 100 EUR with stock A and I lost 20 EUR with another during the year, my taxable capital gain at the end of the year would be 80 EUR. And I would have to pay capital gain taxes for an 80 EUR profit, independently from reinvesting the money or not. Profits and losses became tax relevant at the moment they happened, they were “realized”. (This is where I believe XtremePWN1 and I share the same opinion. And it would be basically the same as investing in a EUR or GBP denominated brokerage account.)


Whenever a trading account allows me to keep a balance in a foreign currency, tax authorities consider this potential currency speculation. This is taxable under certain conditions. Let’s stick to your example. I would initially exchange EUR to USD to buy 1000 USD. Then I invest. If I would do what you’re saying, keep all the initial money invested at all times, profits and losses would be taxed exactly like in the example above. But as soon as the trading account would hold a USD balance over a while, there would be profits and losses on that as well due to FX rate fluctuations. But I could ignore that in your example, because I wouldn’t exchange anything back into EUR. I wouldn’t realize any profits or losses from that. But it gets even more complicated. Tax authorities in my region only consider profits from rate changes taxable when they consider them speculation. And to determine this, the time for holding the currency is relevant. Everything shorter than a year would be speculative, but keeping the foreign currency balance for longer and no additional tax would be due.

Your example is quite simple. One initial investment for 1000 USD, and then you would hold it longer than a year. But now imagine you would make additional investments over the year. And this is critical: would you hold a balance in a foreign currency between or after investments? This holding period of one year I was talking about would apply on a first-in/first-out basis to every chunk of newly added dollars separately. So you could end up with a USD balance in your trading account where some of it would be considered taxable and some of it not at the time you’re exchanging USD back into EUR.

Indeed, the 1000$ invested were from multiple top-ups and each time exchanced from my currency but never withdrawed and never re-exchanged back in my currency. Furthermore, as I understand, in my country the national bank announces an average/year exchange rate for usd, you calaculate your wealth in usd and use the average rate to convert and report (not sure it is a relevant info). But, my main problem is how to calculate wealth because revolut statement does not help at all. I decided to sum up al losses and all gains from the tranzaction list and then substract the results and I obtained almost 1000$ loss even though technically I only lost 300$ (and this is of course because the 700$ remaning were still invested at the end of the year). But still dont know if csd and cdep should be add in the calculation of loss and gains

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Picture from the London RevRally october 2019. When do you think the features in the step 3 will be implemented?

  • ETF’s
  • European stocks
  • Tax wrapped accounts eg. ISA’s
  • Exclusive Premium & Metal features
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Can I start a topic related to the “add stocks company” ?

Please add the following stocks :


Best Regards.


Hi, i open my new account on Revolut with metal plan and i want to start trading of stocks but in the app i didn’t found the option on the dashboard.
Someone can you help me ? Thank you.

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Hey. Is there a way to buy stock automatically? Lets say I would like to buy $10 of Apple each month on the 1st. Can this be done?

Nope, there were talks about this feature but it has not been implemented

Are you from Belgium by any chance? Belgium was affected by brexit and probably can’t accept new trading users because of it for the moment

Hi all,
Probably some have already asked for this, but I address it again:
Is it possible to implement the feature of seeing your dollar cost average per share ?
And for Crypto?
Of course I can calculate it myself, but why not integrate it in the app as many other brokers are also doing this already.
Thanks in advance,
Kind regards.


What is killing me and forcing me to move slowly out of R stock trading, is the lack of GTC on the Expiry date in my orders, I was trying to work it out with the Notifications on price changes, but there is no change to set a comment in the notification, to at least easily know if I wanted to sell or buy at that set price.
I really want to stay in R, even if I have to pay a bit more when it comes to fee (Crypto and Stock) but I’d have a pseudo one stop shop APP. But R is making hard for me. Having access to ETF would be a goal


One area Revolut can improve on that costs nothing with a big impact would be communication. A simple “Hey guys, we’re working on bringing these features(annual reports, ETF’s), there was a slowdown due to Brexit in development and now we’re working hard on this but we can’t give an ETA” would be huge and costs absolutely nothing


Not only there is no communication, yesterday the trading section was not even working. Did anyone bother to give a heads up? Nope