Cryptocurrency tax - disposed of in the US

MrsCheese

I have a number of coins in a cryptocurrency that will be tokenised and available to trade later this year and I am trying to understand the tax implications so we're prepared. It currently does not sit on any exchange. They haven't stated which exchanges it will be tradable on.

There is a possibility that I will have to dispose of the asset into USD$ and then transfer that money to my GBP account in the UK. I am totally new to this so if this sounds like I have misunderstood something about crypto then please do educate me It's hard to know what videos to trust out there. 

I am assuming it's the same as if I have shares on the NYSE; I'd need to sell/ dispose of the asset and then declare the money as it hits my UK account and put it on my tax return and pay any Capital Gains Tax (CGT). Is this the case; i.e., no tax in the US as I'm not a US citizen, re-patriate the money to the UK, declare it and pay the CGT? Is that how it works with crypto (or even shares for that matter)?

Are there any options to minimise the tax I owe in this scenario?

Thanks for any pointers be they guidance/ videos/ blogs/ thoughts/ threads to pull on! I just don't know where to start.

km1500

no you don't pay tax in the US or fill out a US tax return - you simply declare the gain on your UK tax return the same as any other gain and pay cgt if applicable

wmb194

MrsCheese said:

I have a number of coins in a cryptocurrency that will be tokenised and available to trade later this year and I am trying to understand the tax implications so we're prepared. It currently does not sit on any exchange. They haven't stated which exchanges it will be tradable on.

There is a possibility that I will have to dispose of the asset into USD$ and then transfer that money to my GBP account in the UK. I am totally new to this so if this sounds like I have misunderstood something about crypto then please do educate me It's hard to know what videos to trust out there. 

I am assuming it's the same as if I have shares on the NYSE; I'd need to sell/ dispose of the asset and then declare the money as it hits my UK account and put it on my tax return and pay any Capital Gains Tax (CGT). Is this the case; i.e., no tax in the US as I'm not a US citizen, re-patriate the money to the UK, declare it and pay the CGT? Is that how it works with crypto (or even shares for that matter)?

Are there any options to minimise the tax I owe in this scenario?

Thanks for any pointers be they guidance/ videos/ blogs/ thoughts/ threads to pull on! I just don't know where to start.

"There is a possibility that I will have to dispose of the asset into USD$ (sic) and then transfer that money to my GBP account in the UK." 

A trade being denominated in USD doesn't mean that it's captured by the US' taxation system, what matters is the jurisdiction in which the trade takes place* and AFAIK crypto tends to avoid the US. As km1500 writes, it's where you're domiciled for tax purposes that matters.

*Not usually an issue for CGT but there are some exceptions e.g., in the Middle East if you're domiciled abroad.

Keep_pedalling

Where is this crypto currently held and why can’t you trade it until a future date?

I ask because this sounds a little bit like a scam to me. 

MrsCheese

Thanks all, that's been super helpful.

@keep_pedalling - It's just not currently tokenised. So it's like investing in a company pre-IPO. I'm comfortable based upon the research I've done that it's not a scam, but appreciate the concern - There are so many scams out there advertising on legit platforms, reported some bulls*** AI scam on linkedin just the other day.