Bitcoin

thegentleway

lozzy1965 said:

LouCaher said:

Good time of day! You need to study the entire cryptocurrency system, including btc.

First post, bringing this Bitcoin thread back to the top 4 months after the last post on it, when there is already a BITCOIN post running!!!!  I'm thinking of starting a BitCoin post.  Good idea?

Separate thread for each letter and try to keep them in order
B
I
T
C
O
I
N

Type_45

bowlhead99 said:

Type_45 said:

onthebench said:

Type_45 said:

Am I right in saying that you are able to make £12,300 in profits from Bitcoin, every year, without having to declare it or pay tax?

Not that I've made money. I've lost money overall. But just asking.

Yes, crypto gains count towards your capital gains allowance. See https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

I know. That's not what I asked.

As onthebench said, gains from selling crypto count towards your capital gains exemption which is the £12300 figure you mention.

You only get a gain or a loss when you buy or sell something for more or less than you paid for it, and so if your profit is theoretical on paper without actually selling, it is not actually a gain, and likewise if your loss is just that something has gone down in value on paper it is not a loss until you actually sell.

If your gains net of losses for a particular tax year (including crypto, shares, bonds, investments funds, second properties etc) are under £12300 there will be no tax to pay as the net position is covered by your exemption, but:

*If* you already fill out a self assessment return for some other reason, you are expected to include your capital gains calcuation if:

- your total sales proceeds in the tax year are over 4x the annual exemption, you would need to include your profits or losses on the return and give your calculation to HMRC even your total gains were below the £12300. In other words if you did loads of buying and selling and had £49500 of proceeds but only £12000 of gains (or even £12000 of losses), HMRC would still want to receive your numbers so that they can check them if they want to.

- you made total gains of over £12300 and the net position is only under £12300 because of offsetting losses, you need to give HMRC the calculation to claim the losses so they can be happy that you're correctly below £12300 net.

If you are in a position where you have made losses overall for the year, you won't get credit for those losses to carry forward to offset against any future gains unless you declare them to HMRC in the usual timescale.

So for example if you lost £5k in selling shares and cryptocurrencies this tax year it can be worth declaring the loss and providing the calculation to HMRC, because then in some future year if you make £18,000 of capital gains on something in a year when the annual exemption is £13,000, you can use your £5k of brought forward previous losses to offset the £5000 of gains that were in excess of your exemption in that future year. Without having those losses from the previous year recorded and available to carry forward, you would need to pay tax on whatever wasn't covered by the exemption.

I've recently gone back into crypto quite heavily.  So I just wanted to check again for CGT purposes:


CGT is only payable on £12,300 of realised monetary gains within the tax year if what you have bought is then sold for cash for £12,300?

For example, if you buy several crypto coins for £25,000, and they collectively go up in value to £40,000 then no tax is payable and there is nothing to declare as you haben't sold them for cash?  It is ONLY if you sell the crypto and the money (which must be £12,300 or more within the tax year) is sent to a bank account that you need to declare it?


NB:
- I have not made £15000.  I am just asking in the unlikely event I do.
- I will be doing a SA tax form for property earnings, so I may need to declare something on that?
- I do not believe my buying/selling/trading has gone over £49,500.  But I haven't checked yet.

Scottex99

Not an expert but if you are just holding long there is no tax due. If you cash out there will be and this also includes every trade to other crypto too for example from BTC to ETH or ETH to USDT. All taxable events but I’d assume if the gain is under £12k you’d be fine not declaring.

Likely be hard finding accountants or HMRC people who have half a clue too

Diplodicus

Doesn't the long term viability of crypto depend on it taking over from recognised currencies? 
Which will never happen, for political reasons.

Aegis

Type_45 said:

bowlhead99 said:

Type_45 said:

onthebench said:

Type_45 said:

Am I right in saying that you are able to make £12,300 in profits from Bitcoin, every year, without having to declare it or pay tax?

Not that I've made money. I've lost money overall. But just asking.

Yes, crypto gains count towards your capital gains allowance. See https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

I know. That's not what I asked.

As onthebench said, gains from selling crypto count towards your capital gains exemption which is the £12300 figure you mention.

You only get a gain or a loss when you buy or sell something for more or less than you paid for it, and so if your profit is theoretical on paper without actually selling, it is not actually a gain, and likewise if your loss is just that something has gone down in value on paper it is not a loss until you actually sell.

If your gains net of losses for a particular tax year (including crypto, shares, bonds, investments funds, second properties etc) are under £12300 there will be no tax to pay as the net position is covered by your exemption, but:

*If* you already fill out a self assessment return for some other reason, you are expected to include your capital gains calcuation if:

- your total sales proceeds in the tax year are over 4x the annual exemption, you would need to include your profits or losses on the return and give your calculation to HMRC even your total gains were below the £12300. In other words if you did loads of buying and selling and had £49500 of proceeds but only £12000 of gains (or even £12000 of losses), HMRC would still want to receive your numbers so that they can check them if they want to.

- you made total gains of over £12300 and the net position is only under £12300 because of offsetting losses, you need to give HMRC the calculation to claim the losses so they can be happy that you're correctly below £12300 net.

If you are in a position where you have made losses overall for the year, you won't get credit for those losses to carry forward to offset against any future gains unless you declare them to HMRC in the usual timescale.

So for example if you lost £5k in selling shares and cryptocurrencies this tax year it can be worth declaring the loss and providing the calculation to HMRC, because then in some future year if you make £18,000 of capital gains on something in a year when the annual exemption is £13,000, you can use your £5k of brought forward previous losses to offset the £5000 of gains that were in excess of your exemption in that future year. Without having those losses from the previous year recorded and available to carry forward, you would need to pay tax on whatever wasn't covered by the exemption.

I've recently gone back into crypto quite heavily.  So I just wanted to check again for CGT purposes:


CGT is only payable on £12,300 of realised monetary gains within the tax year if what you have bought is then sold for cash for £12,300?

For example, if you buy several crypto coins for £25,000, and they collectively go up in value to £40,000 then no tax is payable and there is nothing to declare as you haben't sold them for cash?  It is ONLY if you sell the crypto and the money (which must be £12,300 or more within the tax year) is sent to a bank account that you need to declare it?


NB:
- I have not made £15000.  I am just asking in the unlikely event I do.
- I will be doing a SA tax form for property earnings, so I may need to declare something on that?
- I do not believe my buying/selling/trading has gone over £49,500.  But I haven't checked yet.

CGT is due when you dispose of an asset for value, so a switch into another crypto asset would still technically trigger gains unless you use the 30-day rule to rebuy the same asset, where both the sale and repurchase are ignored.  You can however sell sufficient coins each year to use your whole CGT allowance, which has the effect of washing out the gains.  The trick is to make sure you wait at least 30 days before re-entering the same market.

Type_45

Scottex99 said:

... and this also includes every trade to other crypto too for example from BTC to ETH or ETH to USDT. All taxable events but I’d assume if the gain is under £12k you’d be fine not declaring.

What does this mean, please?


I have regularly swapped BTC to ETH, or Shiba to Doge, or BTC to XRP etc etc. 

Not massively, as I'm not a daily active trader.  But I've swapped crypto on many occasions.


Are you saying that these swaps are taxable?



Or is it only the actual cash you put in from your bank account compared to the cash (if it's profit of more than £12,300 in a given tax year) which re-enters your bank account which is taxable?

tebbins

Scottex99 said:

Likely be hard finding accountants or HMRC people who have half a clue too

Except they do https://www.gov.uk/hmrc-internal-manuals/cryptoassets-manual

Aegis

Type_45 said:

Scottex99 said:

... and this also includes every trade to other crypto too for example from BTC to ETH or ETH to USDT. All taxable events but I’d assume if the gain is under £12k you’d be fine not declaring.

What does this mean, please?


I have regularly swapped BTC to ETH, or Shiba to Doge, or BTC to XRP etc etc. 

Not massively, as I'm not a daily active trader.  But I've swapped crypto on many occasions.


Are you saying that these swaps are taxable?



Or is it only the actual cash you put in from your bank account compared to the cash (if it's profit of more than £12,300 in a given tax year) which re-enters your bank account which is taxable?

Yes, those swaps are taxable.  Unless you're holding the investment in a tax-sheltered structure, and I'm genuinely not sure (because I haven't looked) whether that's even possible.

Type_45

Aegis said:

Type_45 said:

Scottex99 said:

... and this also includes every trade to other crypto too for example from BTC to ETH or ETH to USDT. All taxable events but I’d assume if the gain is under £12k you’d be fine not declaring.

What does this mean, please?


I have regularly swapped BTC to ETH, or Shiba to Doge, or BTC to XRP etc etc. 

Not massively, as I'm not a daily active trader.  But I've swapped crypto on many occasions.


Are you saying that these swaps are taxable?



Or is it only the actual cash you put in from your bank account compared to the cash (if it's profit of more than £12,300 in a given tax year) which re-enters your bank account which is taxable?

Yes, those swaps are taxable.  Unless you're holding the investment in a tax-sheltered structure, and I'm genuinely not sure (because I haven't looked) whether that's even possible.

How is that tax calculated?  


eg:  you can't buy XRP on Coinbase.  So I bought £1500 of BTC on Coinbase with cash.  I then transferred the £1500 of BTC to Coinomi.  I then swapped the £1500 of BTC to XRP on Coinomi.  I then transferred the £1500 of XRP (minus fees) to my Coinbase wallet.

Type_45

Is it this:

"- your total sales proceeds in the tax year are over 4x the annual exemption, you would need to include your profits or losses on the return and give your calculation to HMRC even your total gains were below the £12300. In other words if you did loads of buying and selling and had £49500 of proceeds but only £12000 of gains (or even £12000 of losses), HMRC would still want to receive your numbers so that they can check them if they want to."