Exchange rate used for dividend

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Hi, does t212 use the rate prevalent at the time of our account being credited? Say for eg. INTC dividend paid today, rate used seem to be 1.406 - 1.409 but it hasn’t even touched 1.4 for a couple of days now.

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2 posts were merged into an existing topic: Introduction of FX Conversion Fee

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The conversion rate used for the dividends with a different currency from your account’s is the current rate of the Buy price of the respective forex pair at the moment of the allocation of the dividend on your account. The dividend is then rounded to the nearest penny. The pairs rates can be checked on the CFD platform.

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This is good to know. Here are some points UK taxpayers might like consider.

[1] HMRC expects the taxpayer to use the exchange rate prevailing on the official payment day to figure the gross taxable dividend, not the rate on the day the broker forwards it. The difference is the two exchange rates is usually small, but can grow significant if these dates become more than a couple days apart. Take a recent case.

  • Visa paid a dividend of $0.32 per share on 1 March when rate was 0.7180 GBP per USD. Trading 212 paid it on 9 March when rate was 0.7200. So 200 shares would be paid as
    200 x 0.32 x 0.7200 = 39.168, rounded up to 39.17.
    The taxable amount is a bit less:
    200 x 0.32 x 0.7180 = 39.059 rounded up to 39.06.

[2] But where did I find that rate for 1 March? HMRC says you should use spot rate, but there is no case law to say which spot rate. Is it an start of day rate, average day rate, an Interbank rate, a cash equivalent rate, a buy rate, a sell rate etc? I use the rate returned by Googlefinance function in Sheets.

[3] The cash equivalent rate seems reasonable. However, there are wide differences between cash rates - say - Revolut or Transferwise vs Travelex at an airport. Travelex rate would well surpass in cost the 0.15% fx fee that Trading 212 will be introducing.
This makes me think that when in future Apple pays you a $100 dividend (after deduction of withholding tax), spot is 0.7200, and it s converted by Trading 212 at a rate of 0.7200 x 0.9985 = 0.71892 to give you ÂŁ71.89 then it would be reasonable to declare ÂŁ71.89 as the taxable amount rather than ÂŁ72.