Bitcoin

Scottex99

You know more than them, trust me.

Yeah I’m not debating whether tax is due or not, it clearly is.

The relevance to the jurisdictions and that (let’s say a lot) of people won’t declare is linked imo. And there’s a few reasons.

Some people are now rich af, they don’t want to pay, or they will move country and not pay.

Bank and govs, except a select few have been anti-coin the last 10 years. Now suddenly it’s a legit asset class, they want their cut. People who are on the libertarian side will not pay them 1p if they can get away with it.

The space has been unregulated from the beginning and still is to some extent, and generally it’s younger investors/gamblers who are probably not keeping records.

Finally, I can hold 100 BTC on a hardware device and put it in a lock box in my shed, nobody knows I have it, I’m not incentivised to declare it possibly. I can flip it through exchangers/mixers and HMRC have zero capacity to figure out where it is, even if they were looking at me personally.

Probably what will happen is HMRC will start requesting names and addresses from various crypto exchanges but that might be a while off yet

Type_45

Scottex99 said:

You know more than them, trust me.

Yeah I’m not debating whether tax is due or not, it clearly is.

The relevance to the jurisdictions and that (let’s say a lot) of people won’t declare is linked imo. And there’s a few reasons.

Some people are now rich af, they don’t want to pay, or they will move country and not pay.

Bank and govs, except a select few have been anti-coin the last 10 years. Now suddenly it’s a legit asset class, they want their cut. People who are on the libertarian side will not pay them 1p if they can get away with it.

The space has been unregulated from the beginning and still is to some extend, and generally it’s younger investors/gamblers do a lot are probably not keeping records.

Finally, I can hold 100 BTC on a hardware device and put it in a lock box in my shed, nobody knows I have it, I’m not incentivised to declare it possibly. I can flip it through exchangers/mixers and HMRC have zero capacity to figure out where it is, even if they were looking at me personally.

Probably what will happen is HMRC will start requesting names and addresses from various crypto exchanges but that might be a while off yet

My understanding is that you don't have to declare your 100 BTC if it's locked away in your shed. You only declare it if you sell more than £12,300 of it in any given tax year. If you aren't realising the gain by cashing it in then it doesn't need to be declared.

Also, I read a while back that Coinbase are already supplying HMRC with the personal details of people who hold more than £5k in their crypto account. 

Type_45

Couple of questions:

1) Does selling your crypto for cash, but keeping that cash in your crypto account, mean that you have to declare it (if it's above £12,300)? Or does it only become a CGT issue when you send the £12,300+ to your bank account?

(This one isn't BTC related, but along the same theme)

2) How is non-ISA S&S tax paid? Is it only paid when you sell the shares and receive the money into your bank account? Or is tax charged as you go? And if you only pay tax when you sell it, do you avoid tax by transferring the shares to your ISA rather than selling for cash?

eskbanker

Type_45 said:

1) Does selling your crypto for cash, but keeping that cash in your crypto account, mean that you have to declare it (if it's above £12,300)? Or does it only become a CGT issue when you send the £12,300+ to your bank account?

It's the act of selling that triggers CGT liability, not what's done with the proceeds.

Type_45 said:

2) How is non-ISA S&S tax paid? Is it only paid when you sell the shares and receive the money into your bank account? Or is tax charged as you go? And if you only pay tax when you sell it, do you avoid tax by transferring the shares to your ISA rather than selling for cash?

Again, it's the act of selling that triggers CGT liability.  Other than certain sharesave schemes, you can't transfer shares into an ISA - you have to sell to cash (triggering CGT liability) and subscribe the cash into the ISA.

eskbanker

Scottex99 said:

Bank and govs, except a select few have been anti-coin the last 10 years. Now suddenly it’s a legit asset class, they want their cut.

I think that's an oversimplification - CGT has been payable on the vast majority of assets (in whatever form) since the year dot, and HMRC clarified their position three years ago with their crypto-specific documentation, so it's not as if they're belatedly looking for a piece of the action, they're just reinforcing that capital gains have always been taxable, except for certain exempt classes such as main property and cars.

Scottex99 said:

People who are on the libertarian side will not pay them 1p if they can get away with it.

The space has been unregulated from the beginning and still is to some extent, and generally it’s younger investors/gamblers who are probably not keeping records.

Glorifying tax evaders as 'libertarians' misses the point - the lack of regulation doesn't give any exemption from tax, and poor record-keeping is likewise no excuse.  Having said that, I'm sure you're right that the possibility of getting away with it will appeal to many, who will no doubt use similar arguments to yours to rationalise their behaviour....

Type_45

Type_45 said:

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 🙂).

Just out of interest:


If I were to today sell (for example) £15,000 of crypto, would I have to declare it on my Self Assessment tax return?

It is over the £12,300 CGT threshhold, but the £15,000 isn't profit, as I am only selling what I have bought with my own funds (see spreadsheet above).

Of the £22k current holding of crypto only £3k is profit.


Is it only if I know that the money I am taking by selling the crypto is actual profit of above £12,300 that I need to declare it (and pay CGT on the amount over £12,300)?




I believe also that you have to declare on the Self Assessment tax return if your total buy/sell/convert amounts to over £49500.  This is regardless of whether you make a profit or loss.  With the above example this would not be the case.  But am aware of this additional factor.

HCIMbtw

Type_45 said:

Type_45 said:

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 🙂).

Just out of interest:


If I were to today sell (for example) £15,000 of crypto, would I have to declare it on my Self Assessment tax return?

It is over the £12,300 CGT threshhold, but the £15,000 isn't profit, as I am only selling what I have bought with my own funds (see spreadsheet above).

Of the £22k current holding of crypto only £3k is profit.


Is it only if I know that the money I am taking by selling the crypto is actual profit of above £12,300 that I need to declare it (and pay CGT on the amount over £12,300)?




I believe also that you have to declare on the Self Assessment tax return if your total buy/sell/convert amounts to over £49500.  This is regardless of whether you make a profit or loss.  With the above example this would not be the case.  But am aware of this additional factor.

Sounds like nothing to declare. If your purchase of the crypto your selling for £15k was £1k, the you'd have gained 14k at the point of sale and be liable for CGT.. But from what you say you have <3k profit overall.. so not liable for any gains tax because you are below the threshold

Aegis

Type_45 said:

Type_45 said:

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 🙂).

Just out of interest:


If I were to today sell (for example) £15,000 of crypto, would I have to declare it on my Self Assessment tax return?

It is over the £12,300 CGT threshhold, but the £15,000 isn't profit, as I am only selling what I have bought with my own funds (see spreadsheet above).

Of the £22k current holding of crypto only £3k is profit.


Is it only if I know that the money I am taking by selling the crypto is actual profit of above £12,300 that I need to declare it (and pay CGT on the amount over £12,300)?




I believe also that you have to declare on the Self Assessment tax return if your total buy/sell/convert amounts to over £49500.  This is regardless of whether you make a profit or loss.  With the above example this would not be the case.  But am aware of this additional factor.

Basically work out the acquisition cost per coin and deduct that from the sale proceeds per coin, then multiply by the number of coins you sold.  CGT now says that you effectively get a single blended cost for each identical asset you own (it used to be that you would track the purchase value for each event, e.g each coin purchase in this case).