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  • FIRST POST
    • antdon
    • By antdon 7th Dec 17, 12:44 PM
    • 174Posts
    • 70Thanks
    antdon
    Money Laundering - Banks & Bitcoin
    • #1
    • 7th Dec 17, 12:44 PM
    Money Laundering - Banks & Bitcoin 7th Dec 17 at 12:44 PM
    OK

    So, Bitcoin is rocketing.

    How much can I put into my bank from bitcoin sales before the bank is obliged to notify the inland revenue?

    And How much tax would I pay on this if it is classed as a Capital Gain?
Page 1
    • fun4everyone
    • By fun4everyone 7th Dec 17, 1:06 PM
    • 850 Posts
    • 1,385 Thanks
    fun4everyone
    • #2
    • 7th Dec 17, 1:06 PM
    • #2
    • 7th Dec 17, 1:06 PM
    You should assume HMRC can see everything you do financially, or your being naive. You should also pay your capital gains tax.

    https://www.gov.uk/government/publications/rates-and-allowances-capital-gains-tax/capital-gains-tax-rates-and-annual-tax-free-allowances.

    Keep/get good records and proof of the price you paid when you bought the bitcoin you are now selling.
    • bowlhead99
    • By bowlhead99 7th Dec 17, 1:08 PM
    • 6,997 Posts
    • 12,602 Thanks
    bowlhead99
    • #3
    • 7th Dec 17, 1:08 PM
    • #3
    • 7th Dec 17, 1:08 PM
    OK

    So, Bitcoin is rocketing.

    How much can I put into my bank from bitcoin sales before the bank is obliged to notify the inland revenue?
    Originally posted by antdon
    Your thread title says money laundering but receiving large amounts of bitcoin proceeds from bitcoins you purchased and sold yourself is not in itself money laundering unless, for example:

    - the person to whom you sold the bitcoins paid you with the proceeds of crime or for example as part of a terrorist funding operation.

    - or if you make gains that you don't declare to HMRC and pay tax on when you should, a portion of your cash balances will become the proceeds of tax evasion and therefore the storage of those criminal funds and movement of them through bank accounts as if they were innocent funds would be money laundering.

    Money laundering does not get reported by banks to HMRC, but they can file a suspicious activity report to the National Crime Agency for any amount they like. If their expectation is that your £20k net salary gets deposited into your account each year with less than £2k a month of credits in your accounts and you have modest spending patterns, and then suddenly your receive £5k to £50k for a couple of weeks in succession and immediately move it out of the account, their algorithms that tell them to be curious might make them be curious.


    And How much tax would I pay on this if it is classed as a Capital Gain?

    If you sell a bitcoin or part of one for more than you paid for it, that's a capital gain. If your capital gains less capital losses less the annual £11.3k capital gains exemption is more than zero in a tax year, you'll owe tax on it. If the amount you owe capital gains tax on taken together with your annual income (salary etc) for the tax year puts you into higher rate tax rather than basic rate tax, the rate is 20%.
    • antdon
    • By antdon 7th Dec 17, 2:48 PM
    • 174 Posts
    • 70 Thanks
    antdon
    • #4
    • 7th Dec 17, 2:48 PM
    • #4
    • 7th Dec 17, 2:48 PM
    Many thanks everyone for the replies....

    '£11.3k capital gains exemption' - does this mean that I can effectively get £11.3K gain each year without paying tax on it....??
    • Aretnap
    • By Aretnap 7th Dec 17, 2:55 PM
    • 2,843 Posts
    • 2,339 Thanks
    Aretnap
    • #5
    • 7th Dec 17, 2:55 PM
    • #5
    • 7th Dec 17, 2:55 PM
    '£11.3k capital gains exemption' - does this mean that I can effectively get £11.3K gain each year without paying tax on it....??
    Originally posted by antdon
    Yes.

    (The message you have entered is too short. Please lengthen your message to at least 10 characters.)
    • antdon
    • By antdon 7th Dec 17, 3:36 PM
    • 174 Posts
    • 70 Thanks
    antdon
    • #6
    • 7th Dec 17, 3:36 PM
    • #6
    • 7th Dec 17, 3:36 PM
    Again Thanks for the reply..

    So given taking that less than £11.3k each year from it is, still a capital gain, but less than the exemption.
    Do I have to declare it?
    • Tom99
    • By Tom99 8th Dec 17, 1:51 AM
    • 677 Posts
    • 401 Thanks
    Tom99
    • #7
    • 8th Dec 17, 1:51 AM
    • #7
    • 8th Dec 17, 1:51 AM
    Again Thanks for the reply..

    So given taking that less than £11.3k each year from it is, still a capital gain, but less than the exemption.
    Do I have to declare it?
    Originally posted by antdon
    Yes but only if the total disposal proceeds are more than 4x annual allowance ie £45,200 in 2017/18.
    • Eco Miser
    • By Eco Miser 8th Dec 17, 2:13 AM
    • 3,224 Posts
    • 2,989 Thanks
    Eco Miser
    • #8
    • 8th Dec 17, 2:13 AM
    • #8
    • 8th Dec 17, 2:13 AM
    '£11.3k capital gains exemption' - does this mean that I can effectively get £11.3K gain each year without paying tax on it....??
    Originally posted by antdon
    yes, but note that that is realised gains on all non-exempt assets: bitcoins, shares, houses, oil paintings, fine wines, ...
    Eco Miser
    Saving money for well over half a century
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