Bitcoin

eskbanker

Type_45 said:

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.

Capital gains tax is payable on chargeable gains, so if you've shunted the same £1500 around various places like that, without changes in value, then you haven't made any gains, so no tax due.

Presumably that example is purely hypothetical though, but as I understand it, it's only the swap of BTC to XRP that would be regarded as a disposal event for CGT purposes, for which you'd need to calculate your profit (or loss) from the variance from the acquisition cost, so £1500 - £1500 = £0 in this case.

Scottex99

tebbins said:

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

Haha, ask anyone in that building what Uniswap is

Scottex99

Type_45 said:

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.

I can't remember what the rules are on transfers but wouldn't make sense that those are taxable. Only the initial buy of £1500 and then a potential sell (or trade) out of XRP later on. But for £1500 I doubt it will matter.

One of my mates is a banking contractor, has a limited company for dividends and holds some decent bags. He asked his accountant how to declare it and he just got a copy and paste from the HMRC website.

So in preparation he is calculating how much he has invested, what his current holdings are and keeping 20% (?) of that gain figure parked aside, which should more or less cover it

Aegis

Type_45 said:

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.

For CGT puyrposes it's effectively 2 transactions, the purchase and disposal of BTC, which is likely to be close to zero change because of how fast you acquire and dispose of the holding, and the purcahse and eventual disposal of XRP, with the acquisition cost set at whatever the disposal value was for your BTC.

Malthusian

Scottex99 said:

Haha, ask anyone in that building what Uniswap is

Why should they care? HMRC are only interested in your capital gains, not where or how you made them.

I doubt anyone in HMRC knows the first thing about chemical engineering, it doesn't change their ability to levy CGT if I make a lot of money in a chemical engineering business and then dispose of it.

Type_45

Thank you for the above replies. To get some constructive tax feedback I'm going to attempt to share with you my exact trading history.

From late 2017 to May 2020 I used various platforms, so would have to dig those numbers up. But I'm confident that there's nothing taxable. I also did not have to do any Self Assessment tax returns in those years (17/18, 18/19, 19/20). Put about £9k in, it went up to £14k and then went down below £2k before settling at around £4,200. Would have to check how many trades I did but it wasn't excessive (ie, it wasn't the £49,500 in any tax year, which Bowlhead refers to on this thread.

In May 2020 I transferred into Coinbase from a separate wallet approximately £4,200. I did this because I find Coinbase easy to use and having a single platform is easier to keep track of transactions etc.

In the 20/21 tax year my transactions (buying, selling and converting crypto) totals £12,824 including fees.

In the 21/22 tax year my transactions (buying, selling and converting crypto) totals £18,266 including fees (so far, as we are still in this tax year).

I have downloaded my history spreadsheet from Coinbase which I can share, if necessary.

Please note that I will be doing Self Assessment tax returns for the 20/21 and 21/22 tax years.

Below is a basic breakdown of my buying/selling to-date:





So, do I have to declare anything on my 20/21 Self Assessment tax return? 

Is there anything I need to do?


Obviously we can't talk about the 21/22 Self Assessment tax return yet as we are still in the tax year and anything can happen. But as things currently stand, would I have to declare anything on the 21/22 Self Assessment tax return?

I have income from property (Rent a Room Scheme) which means I will do a Self Assessment tax return for 20/21 and 21/22. I have no other CGT gains.

(And before anyone says it, yes I know I'm not very good at crypto and after all this time I'm only £2,996 up and have spent the vast majority of my crypto life with losses. I am aware of that, thank you 🙂).

eskbanker

Type_45 said:

So, do I have to declare anything on my 20/21 Self Assessment tax return? 

Is there anything I need to do?


Obviously we can't talk about the 21/22 Self Assessment tax return yet as we are still in the tax year and anything can happen. But as things currently stand, would I have to declare anything on the 21/22 Self Assessment tax return?

You only need to declare chargeable gains that exceed the annual CGT threshold (currently £12,300), so, as you didn't make gains anywhere near that in 2020/21, no CGT declaration needed for that year.

You haven't made any disposals yet in 2021/22, so no CGT liability yet, but if you sell later in this tax year for a profit of over £12,300 then that would change.

Type_45

eskbanker said:

Type_45 said:

So, do I have to declare anything on my 20/21 Self Assessment tax return? 

Is there anything I need to do?


Obviously we can't talk about the 21/22 Self Assessment tax return yet as we are still in the tax year and anything can happen. But as things currently stand, would I have to declare anything on the 21/22 Self Assessment tax return?

You only need to declare chargeable gains that exceed the annual CGT threshold (currently £12,300), so, as you didn't make gains anywhere near that in 2020/21, no CGT declaration needed for that year.

You haven't made any disposals yet in 2021/22, so no CGT liability yet, but if you sell later in this tax year for a profit of over £12,300 then that would change.

Thank you for that. That's much appreciated. 🙂

eskbanker

Type_45 said:

eskbanker said:

Type_45 said:

So, do I have to declare anything on my 20/21 Self Assessment tax return? 

Is there anything I need to do?


Obviously we can't talk about the 21/22 Self Assessment tax return yet as we are still in the tax year and anything can happen. But as things currently stand, would I have to declare anything on the 21/22 Self Assessment tax return?

You only need to declare chargeable gains that exceed the annual CGT threshold (currently £12,300), so, as you didn't make gains anywhere near that in 2020/21, no CGT declaration needed for that year.

You haven't made any disposals yet in 2021/22, so no CGT liability yet, but if you sell later in this tax year for a profit of over £12,300 then that would change.

Thank you for that. That's much appreciated. 🙂

Just to add - you may have only shared a cut-down version of your spreadsheet, but it's important to track individual holdings rather than aggregating your figures across all crypto assets, so if, for example, you buy into both BTC and XRP then you need to be able to identify purchase costs separately for each.  In other words, your spreadsheet should have a column for BTC purchases, another for BTC sales, then two more columns for XRP, etc....

Zola.

Did you buy a load of alts? What was your basket?

I assume you bough a lot of bitcoin right at the very top of the 2017 bull market?