BITCOIN

User232002

Tulips! Clouds! Beanie Babies! Bubbles! Greater Fool!

User232002 said:

I've not been anywhere. I have enjoyed the quiet time and the ability to position accordingly. However, my participation here over the next two years will be mostly spent laughing at the naysayers as time serves to dismantle your arguments.

And then, I will remind you that some of us saw this coming. And that wasn't an accident or luck.

That fat lady is warming up...

Sumselkb said:

I still don't understand how crypto and cgt work exactly. For example, if I buy £1,000 of Bitcoin today, and in 2028 it has a gain of £5,000, and if the allowance is still £3,000 a year, then if I change the Bitcoin to £6,000 and withdraw to my bank then I work out how much cgt to pay.

But if I only change some of the Bitcoin (eg £3,000) and withdraw to my bank but keep the rest as Bitcoin until 2032 then I don't pay cgt? Or I do pay cgt? 

Does my annual salary from my job or personal allowance affect anything? It just seems so complicated.

Your cost basis is £1000. The value of the asset is £6000 at sale. Your gain is £5000. Your allowance is £3000. You pay CGT on the difference of £2000.

The better answer is to buy MSTR, or other Bitcoin proxies, in a S&S ISA and pay no tax at all.

The best answer is to realise that tax rates in this country are only going one way (CGT allowance was £12k two years ago) given demographics and that you should leave to a more tax friendly jurisdiction rather than pay these tax rates for these shoddy public services.

Moose1960

Scottex99 said:

It will probably nuke when it gets to 100k, imagine how many limit sells are sat there!

Interesting. Common sense would suggest a sell off is likely at $100k but then I would have expected previous "landmark" levels to trigger a temporary dip generated by those holding long positions. We haven't seen that though - not at 10k, 20k and so on. We'll see.

@Scottex99 - will you be calling this run's high or have you given up on the Mystic Meg stuff?

Scottex99

I don’t really spend time in charts but we saw it bounce off 69-70 as the previous ATH.

It bounces off most levels except in the rare times where it goes parabolic and straight up for a short period.

Earlier this year I thought 80-120k, so I’ll stick to that 

gatters

Sumselkb said:

I still don't understand how crypto and cgt work exactly. For example, if I buy £1,000 of Bitcoin today, and in 2028 it has a gain of £5,000, and if the allowance is still £3,000 a year, then if I change the Bitcoin to £6,000 and withdraw to my bank then I work out how much cgt to pay.

But if I only change some of the Bitcoin (eg £3,000) and withdraw to my bank but keep the rest as Bitcoin until 2032 then I don't pay cgt? Or I do pay cgt? 

Does my annual salary from my job or personal allowance affect anything? It just seems so complicated.

Your salary doesn't affect your CGT allowance, but might affect the CGT rate you pay. There's different rates for basic and higher tax payers. 

You only make a gain on the amount you trade/change. So assuming you buy £1,000 of BTC: If you sell HALF your BTC in 2028 for £3,000, you've made a gain of £3k - ( Half of £1k) which equals £2,500. Which is within your allowance, no CGT to be paid. You could then sell the remaining BTC in another tax year to remain within that year's allowance.

This assumes no changes to CGT allowances, and is in no way a suggestion to buy BTC. 

Qyburn

How does CGT work if you bought Bitcoin in chunks over several years? Are the "chunks" separately identifiable so that their specific gain can be seen?

caprikid1

"How does CGT work if you bought Bitcoin in chunks over several years? Are the "chunks" separately identifiable so that their specific gain can be seen?"

I suspect its no different to shares ? Obviously shares are linked to something of value IE Part of a company unlike bitcoin.

Scottex99

In theory you have the trade history from each exchange you’ve used and you submit via your accountant.

There’s a few more UK based firms that can help calculate that, than there was previously, but I think staking/yield/DeFi is still a major headache for most

phlebas192

Qyburn said:

How does CGT work if you bought Bitcoin in chunks over several years? Are the "chunks" separately identifiable so that their specific gain can be seen?

You need to pool the purchases to arrive at an average cost per Bitcoin. Full details of how HMRC treats CGT for crypto assets is at https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22000. The pooling section & associated examples should provide all the info you need to come to the correct calculation.

Sumselkb

If you send your crypto from an exchange to a cold wallet, and just hold it long term and don't make regular transactions, then is it okay to leave your bank details saved on the exchange or should you delete your bank details?

Scottex99

Cant hurt to delete them for peace of mind (or risk of using outdated details).

I haven’t personally as the likes of Coinbase, Kraken etc are licensed financial institutions.

$93.7k, can we hit the magical $100k by the weekend? (It’s not magical at all and just an arbitrary round number).

I got a Facebook 5 year memory yesterday from 19/11/2019 for some crypto meme I posted - BTC price at the time - $8.3k