Honest question: if I get paid in USD but then change all my money to British pounds, do I need to pay tax when British pounds increase in value and I trade back to USD?
Indeed you would- trading on the foreign exchange market, as it's called, works much the same way as trading on the stock market. How taxes work for it are apparently specialized and complicated (see https://www.investopedia.com/articles/forex/09/forex-taxatio...), but you would definitely get taxed.