Capital Gains Tax Allowance - Reporting Requirements

karinsj

Hello,
I think this may be a fairly basic question but I have never had to file a self assessment tax return (or any tax return for that matter) before so here goes: Is there a need to inform HMRC of gains made from the sale of shares if the gain does not exceed the CGT allowance for 2020/2021? The phrasing on the Gov website article Money and tax > Capital Gains Tax > Report and pay Capital Gains Tax (apologies, can't yet post links here) makes me think that there is no need to declare anything if the gains fall below the threshold, but I wanted to make sure. Seems a bit odd that this is based on an honour system. 
For context, I received RSUs in two of my previous jobs and stock options in my current job, and I struggled to work out the taxable gains. I got informal advice from a financial advisor to look at the average value of the RSUs at the time they vested (i.e. became my property) but even then it was fairly complicated. I resorted to selling £12000 worth of shares in the 2020/2021 tax year to ensure I stay below the CGT allowance threshold, and repurchased them in a stocks & shares ISA. There must be an easier way to do this or to get (paid) help to work this out? Would an accounting firm generally do this for regular individuals (meaning not especially high-networth)?
Final question - does the use of Bitcoin and other cryptocurrencies (for example exchanging BTC into GBP or buying something with BTC) count towards the CGT allowance? I read the HMRC Policy paper Cryptoassets: tax for individuals (20 December 2019) and found it rather confusing, and there's no mention of the CGT allowance.
Any help is appreciated.

eskbanker

karinsj said:

I think this may be a fairly basic question but I have never had to file a self assessment tax return (or any tax return for that matter) before so here goes: Is there a need to inform HMRC of gains made from the sale of shares if the gain does not exceed the CGT allowance for 2020/2021? The phrasing on the Gov website article Money and tax > Capital Gains Tax > Report and pay Capital Gains Tax (apologies, can't yet post links here) makes me think that there is no need to declare anything if the gains fall below the threshold, but I wanted to make sure. Seems a bit odd that this is based on an honour system. 

If you don't already file tax returns then there's no need to start if your gains are below the threshold, as per https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

If your total gains are less than the tax-free allowance

You do not have to pay tax if your total taxable gains are under your Capital Gains Tax allowance.

You still need to report your gains in your tax return if both of the following apply:

• the total amount you sold the assets for was more than 4 times your allowance
• you’re registered for Self Assessment

karinsj said:

Final question - does the use of Bitcoin and other cryptocurrencies (for example exchanging BTC into GBP or buying something with BTC) count towards the CGT allowance? I read the HMRC Policy paper Cryptoassets: tax for individuals (20 December 2019) and found it rather confusing, and there's no mention of the CGT allowance.

https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals does state:

In the vast majority of cases, individuals hold cryptoassets as a personal investment, usually for capital appreciation in its value or to make particular purchases. They will be liable to pay Capital Gains Tax when they dispose of their cryptoassets.

In other words, they're regarded in the same way as any other assets in terms of being liable to CGT if you profit when disposing of them (however that may be), but further details are explained at https://www.gov.uk/guidance/check-if-you-need-to-pay-tax-when-you-sell-cryptoassets