Bitcoin

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.

In my personal situation, I've made a hash out of making money from crypto.

In late 2017 I put in about £9,600. Briefly, the value of the crypto went up to £13k or something like that. But then, during 2018 the value went down to less than £2k for a while, before settling to about £3k-£5k. I traded between cryptos a little bit, but mostly I've just had a few types of coins which have sat in my account.

Then, in the last few months, of course, the price rose. When the value of my crypto got to £8k recently I sold the lot. This means that I made a loss overall of about £1.6k.

But in the last couple of weeks I've missed being part of crypto so have put £2k back in. And that amount is worth about the same now.

I don't have any other investments outside of my ISA. I do not own a second home. I am not self employed, I am PAYE. I do not fill in tax returns.

So, I can't imagine that my CGT is worth troubling the tax man about?

bery_451

HansOndabush said:

bery_451 said:

If all you saying Bitcoin is a Ponzi Scheme like the Tulip bubble then why all these mega institutions and multi- billion hedge funds world wide are buying bitcoin at high prices now? These super rich entities employ the smartest economists and mathematicians in the world to help them decide to buy bitcoins. So you telling this smart money going into bitcoin is dumb? 

I remember back in the day early 90s the Internet was slacked off saying it will never take off and email will never beat post letters. Oh my look at were we are now.

The future is bitcoin a new generation of money that is decentralised. Central banks worldwide are trying to compete with bitcoin by releasing CBDC's Central Bank Digital Currencies but will fail at then end because its not decentralised like bitcoin. CBDC's is like programmable money which is a scary though as it wont have that privacy like paper cash does.

Central banks are not trying to compete with bitcoin; bitcoin is a non-event for them; they can outlaw it whenever they choose but they don't need to (although they did move against ripple recently). The point of their own digital currency is to control money supply and indeed individuals if they want; there is no way ever that governments and central banks would allow bitcoin to become mainstream. The future might be digital currency but it will be government controlled and possibly have to backed by something tangible like gold depending on how the current crisis plays out.

Ripple xrp is centralised meaning it has a head office or head owner CEO somewhere that can control the whole ripple network meaning regulators governments can go after a centralised entity easily.

Bitcoin however is decentralised and central banks will try to ban it but will fail at the end as the only way to stop bitcoin growing is switch off the internet for the world 

CBDC's is centralised just like ripple and hence CBDC's centralised coins are scams.

bery_451

https://www.youtube.com/watch?v=6HFtk29k7-Y

booneruk

symonsz said:

thegentleway said:

Not if you bank with HSBC
https://www.thetimes.co.uk/article/bitcoin-holders-barred-from-depositing-profits-in-uk-banks-pgswbfrdz

I have bought a small amount of Bitcoin with HSBC through Mode banking, which went through quite smoothly. I have not tried to withdraw my profits yet, but I have had no issues with small amounts.

I bank with HSBC and cashed in a few thousand at Coinbase Pro before completing a fast transfer to the bank - this worked absolutely fine and was instant. Does this suggest the article is somewhat inaccurate or could HSBC unwind the transfer and send it back in the days to come? (the money's already been moved along to my massive interest bearing account @ Marcus!)

Thanks

Linton

Type_45 said:

bowlhead99 said:

Type_45 said:

I would far rather invest in bitcoin through my ISA for tax reasons. Does anyone know of a fund where this is possible? 

Cryptocurrency isn't an allowable asset type for an ISA, and ISAs can't hold derivatives such as CFDs and options to get exposure that way. Technically, ISAs are allowed to hold exchange traded notes / exchange traded certificates where the thing traded on a stock exchange is a loan note backed by the bitcoin, with an annual management fee, just as you can buy ETFs and ETCs listed on a stock exchange and backed by gold. 

However, unfortunately the FCA decided to ban the sale of cryptocurrency derivatives and ETN-type products to UK retail customers a few months ago, which became effective this week. So the mainstream UK brokers and investment platforms which could offer these to retail investors up to last month, will no longer allow you to buy them in your ISA now. If you have them you can keep them, and dispose of them whenever you like (I still have one in my pension, and have made some sales in the last couple of months as the price went crazy), but if you don't have them they won't sell you them now.

FCA bans the sale of crypto-derivatives to retail consumers | FCA

As the FCA ban only extends to crypto derivatives such as ETCs / ETNs  rather than to funds which hold a broad portfolio of assets with diversification of risk (such as open ended funds and investment trusts), it would be possible to take 'exposure' to Bitcoin amongst a bunch of other things if you found an investment manager running an ISA-qualifying fund or IT which had BTC  or a BTC ETF as a portion of its own portfolio. 

There are a couple in the US (for example Grayscale has a Bitcoin Trust  running as an ETF, and some other mutual funds or ETFs invest into it). However, I'm not aware of any at the moment which would be accessible inside a UK ISA, because those US products won't issue the required prospectus and KID documents meeting the standards which would be required if offering to UK investors.

If you are looking to take exposure while minimising taxes - as an alternative to buying in an ISA you could use certain derivatives such as spreadbets. However, due to the FCA ban you wouldn't be able to do this as a retail investor and would need to sign up to a provider such as IG.com as a professional client.  If you don't have hundreds of thousands of liquid assets or a history of consistently placing leveraged trades of significant value they are unlikely to accept you as such, and you would lose all 'retail customer' protections.

Thank you for that. Well, looks like Bitcoin in an ISA won't be available for a while then. I will just stick to using Coinbase and make sure that I don't make more than £12,300 in any given financial year (which I'm in no danger of anyway).

You should still keep records of buys and sells for 7 years as  HMRC could ask for the information if, for example, they suspect you of avoiding tax.

Type_45

Linton said:

Type_45 said:

bowlhead99 said:

Type_45 said:

I would far rather invest in bitcoin through my ISA for tax reasons. Does anyone know of a fund where this is possible? 

Cryptocurrency isn't an allowable asset type for an ISA, and ISAs can't hold derivatives such as CFDs and options to get exposure that way. Technically, ISAs are allowed to hold exchange traded notes / exchange traded certificates where the thing traded on a stock exchange is a loan note backed by the bitcoin, with an annual management fee, just as you can buy ETFs and ETCs listed on a stock exchange and backed by gold. 

However, unfortunately the FCA decided to ban the sale of cryptocurrency derivatives and ETN-type products to UK retail customers a few months ago, which became effective this week. So the mainstream UK brokers and investment platforms which could offer these to retail investors up to last month, will no longer allow you to buy them in your ISA now. If you have them you can keep them, and dispose of them whenever you like (I still have one in my pension, and have made some sales in the last couple of months as the price went crazy), but if you don't have them they won't sell you them now.

FCA bans the sale of crypto-derivatives to retail consumers | FCA

As the FCA ban only extends to crypto derivatives such as ETCs / ETNs  rather than to funds which hold a broad portfolio of assets with diversification of risk (such as open ended funds and investment trusts), it would be possible to take 'exposure' to Bitcoin amongst a bunch of other things if you found an investment manager running an ISA-qualifying fund or IT which had BTC  or a BTC ETF as a portion of its own portfolio. 

There are a couple in the US (for example Grayscale has a Bitcoin Trust  running as an ETF, and some other mutual funds or ETFs invest into it). However, I'm not aware of any at the moment which would be accessible inside a UK ISA, because those US products won't issue the required prospectus and KID documents meeting the standards which would be required if offering to UK investors.

If you are looking to take exposure while minimising taxes - as an alternative to buying in an ISA you could use certain derivatives such as spreadbets. However, due to the FCA ban you wouldn't be able to do this as a retail investor and would need to sign up to a provider such as IG.com as a professional client.  If you don't have hundreds of thousands of liquid assets or a history of consistently placing leveraged trades of significant value they are unlikely to accept you as such, and you would lose all 'retail customer' protections.

Thank you for that. Well, looks like Bitcoin in an ISA won't be available for a while then. I will just stick to using Coinbase and make sure that I don't make more than £12,300 in any given financial year (which I'm in no danger of anyway).

You should still keep records of buys and sells for 7 years as  HMRC could ask for the information if, for example, they suspect you of avoiding tax.

The crypto exchanges automatically record your trading history. And obviously you can also show what has gone in and out of your bank account. So I don't think any further efforts of documenting your crypto trading is really required.

ChilliBob

Linton said:

Type_45 said:

bowlhead99 said:

Type_45 said:

I would far rather invest in bitcoin through my ISA for tax reasons. Does anyone know of a fund where this is possible? 

Cryptocurrency isn't an allowable asset type for an ISA, and ISAs can't hold derivatives such as CFDs and options to get exposure that way. Technically, ISAs are allowed to hold exchange traded notes / exchange traded certificates where the thing traded on a stock exchange is a loan note backed by the bitcoin, with an annual management fee, just as you can buy ETFs and ETCs listed on a stock exchange and backed by gold. 

However, unfortunately the FCA decided to ban the sale of cryptocurrency derivatives and ETN-type products to UK retail customers a few months ago, which became effective this week. So the mainstream UK brokers and investment platforms which could offer these to retail investors up to last month, will no longer allow you to buy them in your ISA now. If you have them you can keep them, and dispose of them whenever you like (I still have one in my pension, and have made some sales in the last couple of months as the price went crazy), but if you don't have them they won't sell you them now.

FCA bans the sale of crypto-derivatives to retail consumers | FCA

As the FCA ban only extends to crypto derivatives such as ETCs / ETNs  rather than to funds which hold a broad portfolio of assets with diversification of risk (such as open ended funds and investment trusts), it would be possible to take 'exposure' to Bitcoin amongst a bunch of other things if you found an investment manager running an ISA-qualifying fund or IT which had BTC  or a BTC ETF as a portion of its own portfolio. 

There are a couple in the US (for example Grayscale has a Bitcoin Trust  running as an ETF, and some other mutual funds or ETFs invest into it). However, I'm not aware of any at the moment which would be accessible inside a UK ISA, because those US products won't issue the required prospectus and KID documents meeting the standards which would be required if offering to UK investors.

If you are looking to take exposure while minimising taxes - as an alternative to buying in an ISA you could use certain derivatives such as spreadbets. However, due to the FCA ban you wouldn't be able to do this as a retail investor and would need to sign up to a provider such as IG.com as a professional client.  If you don't have hundreds of thousands of liquid assets or a history of consistently placing leveraged trades of significant value they are unlikely to accept you as such, and you would lose all 'retail customer' protections.

Thank you for that. Well, looks like Bitcoin in an ISA won't be available for a while then. I will just stick to using Coinbase and make sure that I don't make more than £12,300 in any given financial year (which I'm in no danger of anyway).

You should still keep records of buys and sells for 7 years as  HMRC could ask for the information if, for example, they suspect you of avoiding tax.

Unrelated to crypto, so, if someone was a 'day trader' or moved stuff around quite a bit then the record keeping sounds rather onerous? 
I'm not intending to be that person but keen to know what sort of record keeping I need to sort out before I embark on investing just to make sure my tax return doesn't become impossible or hideous.

On a tangent, there's lots of info on different assets, funds, charges etc but I haven't seen much in terms of the actual act of investing - e.g the actuslly tasks of buying/selling/record keeping/tax/monitoring and reporting. Not sure whether this is because when you start this is all just obvious or something!

On the bitcoin side of things, it's got so popular even my Mum talked to me about it this morning and suggested I chuck a few hundred quid into it lol. Whilst im tempted I think my time would be better spent

eskbanker

ChilliBob said:

Unrelated to crypto, so, if someone was a 'day trader' or moved stuff around quite a bit then the record keeping sounds rather onerous? 
I'm not intending to be that person but keen to know what sort of record keeping I need to sort out before I embark on investing just to make sure my tax return doesn't become impossible or hideous.

https://www.gov.uk/capital-gains-tax/records explains what you need for CGT purposes, which will typically be the key area in such circumstances, although it's also important to keep track of dividend income for the annual tax return.

Edit: if any further discussion is needed on this point, it would be better in another thread!

Type_45

ChilliBob said:

Linton said:

Type_45 said:

bowlhead99 said:

Type_45 said:

I would far rather invest in bitcoin through my ISA for tax reasons. Does anyone know of a fund where this is possible? 

Cryptocurrency isn't an allowable asset type for an ISA, and ISAs can't hold derivatives such as CFDs and options to get exposure that way. Technically, ISAs are allowed to hold exchange traded notes / exchange traded certificates where the thing traded on a stock exchange is a loan note backed by the bitcoin, with an annual management fee, just as you can buy ETFs and ETCs listed on a stock exchange and backed by gold. 

However, unfortunately the FCA decided to ban the sale of cryptocurrency derivatives and ETN-type products to UK retail customers a few months ago, which became effective this week. So the mainstream UK brokers and investment platforms which could offer these to retail investors up to last month, will no longer allow you to buy them in your ISA now. If you have them you can keep them, and dispose of them whenever you like (I still have one in my pension, and have made some sales in the last couple of months as the price went crazy), but if you don't have them they won't sell you them now.

FCA bans the sale of crypto-derivatives to retail consumers | FCA

As the FCA ban only extends to crypto derivatives such as ETCs / ETNs  rather than to funds which hold a broad portfolio of assets with diversification of risk (such as open ended funds and investment trusts), it would be possible to take 'exposure' to Bitcoin amongst a bunch of other things if you found an investment manager running an ISA-qualifying fund or IT which had BTC  or a BTC ETF as a portion of its own portfolio. 

There are a couple in the US (for example Grayscale has a Bitcoin Trust  running as an ETF, and some other mutual funds or ETFs invest into it). However, I'm not aware of any at the moment which would be accessible inside a UK ISA, because those US products won't issue the required prospectus and KID documents meeting the standards which would be required if offering to UK investors.

If you are looking to take exposure while minimising taxes - as an alternative to buying in an ISA you could use certain derivatives such as spreadbets. However, due to the FCA ban you wouldn't be able to do this as a retail investor and would need to sign up to a provider such as IG.com as a professional client.  If you don't have hundreds of thousands of liquid assets or a history of consistently placing leveraged trades of significant value they are unlikely to accept you as such, and you would lose all 'retail customer' protections.

Thank you for that. Well, looks like Bitcoin in an ISA won't be available for a while then. I will just stick to using Coinbase and make sure that I don't make more than £12,300 in any given financial year (which I'm in no danger of anyway).

You should still keep records of buys and sells for 7 years as  HMRC could ask for the information if, for example, they suspect you of avoiding tax.

Unrelated to crypto, so, if someone was a 'day trader' or moved stuff around quite a bit then the record keeping sounds rather onerous? 
I'm not intending to be that person but keen to know what sort of record keeping I need to sort out before I embark on investing just to make sure my tax return doesn't become impossible or hideous.

On a tangent, there's lots of info on different assets, funds, charges etc but I haven't seen much in terms of the actual act of investing - e.g the actuslly tasks of buying/selling/record keeping/tax/monitoring and reporting. Not sure whether this is because when you start this is all just obvious or something!

On the bitcoin side of things, it's got so popular even my Mum talked to me about it this morning and suggested I chuck a few hundred quid into it lol. Whilst im tempted I think my time would be better spent

Can you not do your trading in an ISA, and therefore it's not taxable? 

I don't know as my ISA is simply a savings account with VLS in it.

NottinghamKnight

Type_45 said:

ChilliBob said:

Linton said:

Type_45 said:

bowlhead99 said:

Type_45 said:

I would far rather invest in bitcoin through my ISA for tax reasons. Does anyone know of a fund where this is possible? 

Cryptocurrency isn't an allowable asset type for an ISA, and ISAs can't hold derivatives such as CFDs and options to get exposure that way. Technically, ISAs are allowed to hold exchange traded notes / exchange traded certificates where the thing traded on a stock exchange is a loan note backed by the bitcoin, with an annual management fee, just as you can buy ETFs and ETCs listed on a stock exchange and backed by gold. 

However, unfortunately the FCA decided to ban the sale of cryptocurrency derivatives and ETN-type products to UK retail customers a few months ago, which became effective this week. So the mainstream UK brokers and investment platforms which could offer these to retail investors up to last month, will no longer allow you to buy them in your ISA now. If you have them you can keep them, and dispose of them whenever you like (I still have one in my pension, and have made some sales in the last couple of months as the price went crazy), but if you don't have them they won't sell you them now.

FCA bans the sale of crypto-derivatives to retail consumers | FCA

As the FCA ban only extends to crypto derivatives such as ETCs / ETNs  rather than to funds which hold a broad portfolio of assets with diversification of risk (such as open ended funds and investment trusts), it would be possible to take 'exposure' to Bitcoin amongst a bunch of other things if you found an investment manager running an ISA-qualifying fund or IT which had BTC  or a BTC ETF as a portion of its own portfolio. 

There are a couple in the US (for example Grayscale has a Bitcoin Trust  running as an ETF, and some other mutual funds or ETFs invest into it). However, I'm not aware of any at the moment which would be accessible inside a UK ISA, because those US products won't issue the required prospectus and KID documents meeting the standards which would be required if offering to UK investors.

If you are looking to take exposure while minimising taxes - as an alternative to buying in an ISA you could use certain derivatives such as spreadbets. However, due to the FCA ban you wouldn't be able to do this as a retail investor and would need to sign up to a provider such as IG.com as a professional client.  If you don't have hundreds of thousands of liquid assets or a history of consistently placing leveraged trades of significant value they are unlikely to accept you as such, and you would lose all 'retail customer' protections.

Thank you for that. Well, looks like Bitcoin in an ISA won't be available for a while then. I will just stick to using Coinbase and make sure that I don't make more than £12,300 in any given financial year (which I'm in no danger of anyway).

You should still keep records of buys and sells for 7 years as  HMRC could ask for the information if, for example, they suspect you of avoiding tax.

Unrelated to crypto, so, if someone was a 'day trader' or moved stuff around quite a bit then the record keeping sounds rather onerous? 
I'm not intending to be that person but keen to know what sort of record keeping I need to sort out before I embark on investing just to make sure my tax return doesn't become impossible or hideous.

On a tangent, there's lots of info on different assets, funds, charges etc but I haven't seen much in terms of the actual act of investing - e.g the actuslly tasks of buying/selling/record keeping/tax/monitoring and reporting. Not sure whether this is because when you start this is all just obvious or something!

On the bitcoin side of things, it's got so popular even my Mum talked to me about it this morning and suggested I chuck a few hundred quid into it lol. Whilst im tempted I think my time would be better spent

Can you not do your trading in an ISA, and therefore it's not taxable? 

I don't know as my ISA is simply a savings account with VLS in it.

No tax to pay in an isa but it appears that you can't hold bitcoin in an isa. 
I don't think your isa is simply a savings account if you hold vls in it though.