Declare crypto on Self-Assessment tax return?

1404

I now have my Coinbase financial years 20/21, 22/23, 23/24 on my own spreadsheets. 

I need to also go through the other exchanges I've used over the years for conversions/swapping etc and add in those transactions to each financial year.  The likes of Kraken, Coinomi etc.  I generally only use these exchanges when coins I am after aren't available on Coinbase, so hopefully there won't be lots of transactions on them.

However - my 2017-2020 history did feature those exchanges a lot as I wasn't on Coinbase at that time.  That could be a bit of a nightmare when I come to that.  HMRC weren't involved with crypto back then.  And I also sold all of that crypto in December 2020 for a £1500 loss before starting again in January 2021.

Hopefully it will become clear, but I'm still not entirely sure how useful this exercise is.  Hopefully I will indeed be able to extract some kind of figure which the 3 coins I currently have (BTC, XRP and XLM) cost me to buy once factoring in swaps along the way...

masonic

1404 said:

Does anyone have a template for a spreadsheet they use to log crypto trades for tax purposes?

There are numerous tools available that are geared towards shares. These should serve you well. You'd just need to treat a switch between coins as a sale for cash and then a buy.

1404

Below is a screenshot of some crypto conversions on my Coinbase.  I have highlighted column "I" which is the total of the conversion (including fees and spread).

Do I just add column I for crypto conversions to my buys and sells of other crypto?  And this would give me all my taxable events? 

I would therefore ignore sends/receives/deposits/withdrawals as those aren't taxable events?

masonic

Sends and receives do not need to be considered here if they were transfers between your accounts. You do need to consider all of your accounts when calculating your base cost for each coin. This should be the average acquisition cost for each unit you hold across all platforms. Then for disposals you can calculate your gain/loss as the difference between the unit price on the date of the transaction minus the base cost multiplied by the number of units disposed/converted. Your base cost will only be affected by the addition of new units into the pool, whereas disposals will just cancel units from it.

If your sends or receives were anything that could be considered a purchase or disposal, such as a private trade with someone else, then that would need to be included.

At a minimum your spreadsheet will need to track the running total units held before the current transaction, their base cost, and the new number of units and new base cost after the transaction. You should probably have two rows for each conversion, one for the coin disposed and another for the coin acquired.

There was a really nice website and spreadsheet I used when I was faced with CGT calculations on some investment trusts many years ago. I did have a look, but I can't find it now.

Also, watch out for sales that can be matched to later purchases within 30 days for bed & breakfasting rules. For example rows 27 - 29.

1404

masonic said:

Sends and receives do not need to be considered here if they were transfers between your accounts. You do need to consider all of your accounts when calculating your base cost for each coin. This should be the average acquisition cost for each unit you hold across all platforms. Then for disposals you can calculate your gain/loss as the difference between the unit price on the date of the transaction minus the base cost multiplied by the number of units disposed/converted. Your base cost will only be affected by the addition of new units into the pool, whereas disposals will just cancel units from it.

If your sends or receives were anything that could be considered a purchase or disposal, such as a private trade with someone else, then that would need to be included.

At a minimum your spreadsheet will need to track the running total units held before the current transaction, their base cost, and the new number of units and new base cost after the transaction. You should probably have two rows for each conversion, one for the coin disposed and another for the coin acquired.

There was a really nice website and spreadsheet I used when I was faced with CGT calculations on some investment trusts many years ago. I did have a look, but I can't find it now.

Also, watch out for sales that can be matched to later purchases within 30 days for bed & breakfasting rules. For example rows 27 - 29.

Sends and receives were between my accounts. As we're deposits and withdrawals of cash. 

As for the finer details, there's only so much I can (or am capable) of doing. HMRC, I hope, would see if they checked that I'm doing my best with a nightmare of calculations here. If they think they can do a better job and catch me out with this then they are welcome to help me out with it. I don't owe them a penny, so it's really all just for nothing for them.

masonic

1404 said:

masonic said:

Sends and receives do not need to be considered here if they were transfers between your accounts. You do need to consider all of your accounts when calculating your base cost for each coin. This should be the average acquisition cost for each unit you hold across all platforms. Then for disposals you can calculate your gain/loss as the difference between the unit price on the date of the transaction minus the base cost multiplied by the number of units disposed/converted. Your base cost will only be affected by the addition of new units into the pool, whereas disposals will just cancel units from it.

If your sends or receives were anything that could be considered a purchase or disposal, such as a private trade with someone else, then that would need to be included.

At a minimum your spreadsheet will need to track the running total units held before the current transaction, their base cost, and the new number of units and new base cost after the transaction. You should probably have two rows for each conversion, one for the coin disposed and another for the coin acquired.

There was a really nice website and spreadsheet I used when I was faced with CGT calculations on some investment trusts many years ago. I did have a look, but I can't find it now.

Also, watch out for sales that can be matched to later purchases within 30 days for bed & breakfasting rules. For example rows 27 - 29.

Sends and receives were between my accounts. As we're deposits and withdrawals of cash. 

As for the finer details, there's only so much I can (or am capable) of doing. HMRC, I hope, would see if they checked that I'm doing my best with a nightmare of calculations here. If they think they can do a better job and catch me out with this then they are welcome to help me out with it. I don't owe them a penny, so it's really all just for nothing for them.

If you come to owe them a penny in the future, then you will need to know at a minimum the base cost of the coins you hold now (at least some of these will be from a pool affected by these earlier transactions). If you don't want to go back through these historic transactions, then you could wipe the slate clean by getting rid of all current holdings (either cash out or trade for something you haven't held in the last 30 days) and refrain from repurchasing any of those holdings for a period of 30 days.

It doesn't need to be this complicated. The complexity is related to all of the transactions.

1404

masonic said:

1404 said:

masonic said:

Sends and receives do not need to be considered here if they were transfers between your accounts. You do need to consider all of your accounts when calculating your base cost for each coin. This should be the average acquisition cost for each unit you hold across all platforms. Then for disposals you can calculate your gain/loss as the difference between the unit price on the date of the transaction minus the base cost multiplied by the number of units disposed/converted. Your base cost will only be affected by the addition of new units into the pool, whereas disposals will just cancel units from it.

If your sends or receives were anything that could be considered a purchase or disposal, such as a private trade with someone else, then that would need to be included.

At a minimum your spreadsheet will need to track the running total units held before the current transaction, their base cost, and the new number of units and new base cost after the transaction. You should probably have two rows for each conversion, one for the coin disposed and another for the coin acquired.

There was a really nice website and spreadsheet I used when I was faced with CGT calculations on some investment trusts many years ago. I did have a look, but I can't find it now.

Also, watch out for sales that can be matched to later purchases within 30 days for bed & breakfasting rules. For example rows 27 - 29.

Sends and receives were between my accounts. As we're deposits and withdrawals of cash. 

As for the finer details, there's only so much I can (or am capable) of doing. HMRC, I hope, would see if they checked that I'm doing my best with a nightmare of calculations here. If they think they can do a better job and catch me out with this then they are welcome to help me out with it. I don't owe them a penny, so it's really all just for nothing for them.

If you come to owe them a penny in the future, then you will need to know at a minimum the base cost of the coins you hold now (at least some of these will be from a pool affected by these earlier transactions). If you don't want to go back through these historic transactions, then you could wipe the slate clean by getting rid of all current holdings (either cash out or trade for something you haven't held in the last 30 days) and refrain from repurchasing any of those holdings for a period of 30 days.

It doesn't need to be this complicated. The complexity is related to all of the transactions.

What would be the tax implications of selling £15k of coins for 30 days (or longer)? That's obviously well over £3000, although as I've pointed out I've not make any profit from it (in fact a £3k loss)

masonic

1404 said:

masonic said:

1404 said:

masonic said:

Sends and receives do not need to be considered here if they were transfers between your accounts. You do need to consider all of your accounts when calculating your base cost for each coin. This should be the average acquisition cost for each unit you hold across all platforms. Then for disposals you can calculate your gain/loss as the difference between the unit price on the date of the transaction minus the base cost multiplied by the number of units disposed/converted. Your base cost will only be affected by the addition of new units into the pool, whereas disposals will just cancel units from it.

If your sends or receives were anything that could be considered a purchase or disposal, such as a private trade with someone else, then that would need to be included.

At a minimum your spreadsheet will need to track the running total units held before the current transaction, their base cost, and the new number of units and new base cost after the transaction. You should probably have two rows for each conversion, one for the coin disposed and another for the coin acquired.

There was a really nice website and spreadsheet I used when I was faced with CGT calculations on some investment trusts many years ago. I did have a look, but I can't find it now.

Also, watch out for sales that can be matched to later purchases within 30 days for bed & breakfasting rules. For example rows 27 - 29.

Sends and receives were between my accounts. As we're deposits and withdrawals of cash. 

As for the finer details, there's only so much I can (or am capable) of doing. HMRC, I hope, would see if they checked that I'm doing my best with a nightmare of calculations here. If they think they can do a better job and catch me out with this then they are welcome to help me out with it. I don't owe them a penny, so it's really all just for nothing for them.

If you come to owe them a penny in the future, then you will need to know at a minimum the base cost of the coins you hold now (at least some of these will be from a pool affected by these earlier transactions). If you don't want to go back through these historic transactions, then you could wipe the slate clean by getting rid of all current holdings (either cash out or trade for something you haven't held in the last 30 days) and refrain from repurchasing any of those holdings for a period of 30 days.

It doesn't need to be this complicated. The complexity is related to all of the transactions.

What would be the tax implications of selling £15k of coins for 30 days (or longer)? That's obviously well over £3000, although as I've pointed out I've not make any profit from it (in fact a £3k loss)

You would need to make either £50k disposals or £3k gains to have any reporting or tax implications, providing you don't make disposals of other assets. So based on what you have said so far it is an option. But obviously starts moving into tail-wagging-dog territory, so needs some careful consideration.

Though I am uncertain of whether you need to report capital losses to HMRC in order to use them to offset gains in a future tax year assuming there is no other reason to report. I know you would not need to within the same tax year. I've not been in that situation before but I'm sure someone can confirm this. It may not be relevant if you don't need these prior losses to reduce your gain below £3k.

Edit: The following page suggests you would need to at least write to HMRC to declare a loss from a prior tax year if you need this to reduce a later gain: https://www.gov.uk/capital-gains-tax/losses

1404

masonic said:

1404 said:

masonic said:

1404 said:

masonic said:

Sends and receives do not need to be considered here if they were transfers between your accounts. You do need to consider all of your accounts when calculating your base cost for each coin. This should be the average acquisition cost for each unit you hold across all platforms. Then for disposals you can calculate your gain/loss as the difference between the unit price on the date of the transaction minus the base cost multiplied by the number of units disposed/converted. Your base cost will only be affected by the addition of new units into the pool, whereas disposals will just cancel units from it.

If your sends or receives were anything that could be considered a purchase or disposal, such as a private trade with someone else, then that would need to be included.

At a minimum your spreadsheet will need to track the running total units held before the current transaction, their base cost, and the new number of units and new base cost after the transaction. You should probably have two rows for each conversion, one for the coin disposed and another for the coin acquired.

There was a really nice website and spreadsheet I used when I was faced with CGT calculations on some investment trusts many years ago. I did have a look, but I can't find it now.

Also, watch out for sales that can be matched to later purchases within 30 days for bed & breakfasting rules. For example rows 27 - 29.

Sends and receives were between my accounts. As we're deposits and withdrawals of cash. 

As for the finer details, there's only so much I can (or am capable) of doing. HMRC, I hope, would see if they checked that I'm doing my best with a nightmare of calculations here. If they think they can do a better job and catch me out with this then they are welcome to help me out with it. I don't owe them a penny, so it's really all just for nothing for them.

If you come to owe them a penny in the future, then you will need to know at a minimum the base cost of the coins you hold now (at least some of these will be from a pool affected by these earlier transactions). If you don't want to go back through these historic transactions, then you could wipe the slate clean by getting rid of all current holdings (either cash out or trade for something you haven't held in the last 30 days) and refrain from repurchasing any of those holdings for a period of 30 days.

It doesn't need to be this complicated. The complexity is related to all of the transactions.

What would be the tax implications of selling £15k of coins for 30 days (or longer)? That's obviously well over £3000, although as I've pointed out I've not make any profit from it (in fact a £3k loss)

You would need to make either £50k disposals or £3k gains to have any reporting or tax implications, providing you don't make disposals of other assets. So based on what you have said so far it is an option. But obviously starts moving into tail-wagging-dog territory, so needs some careful consideration.

Though I am uncertain of whether you need to report capital losses to HMRC in order to use them to offset gains in a future tax year assuming there is no other reason to report. I know you would not need to within the same tax year. I've not been in that situation before but I'm sure someone can confirm this. It may not be relevant if you don't need these prior losses to reduce your gain below £3k.

Edit: The following page suggests you would need to at least write to HMRC to declare a loss from a prior tax year if you need this to reduce a later gain: https://www.gov.uk/capital-gains-tax/losses

I genuinely have never had any interest in trying to get anything back for my £1500 loss in previous tax years. I took that on the chin. It was my fault and I've moved on.

I aim to make that back (and more) either in this bull run or in the future. 

But at the same time I want to stay on the right side of HMRC.

Bostonerimus1

1404 said:

Bostonerimus1 said:

If your exchange/platform doesn’t track your annual CGT etc liabilities from sales then that can be a real pain. Tracking cost basis can get complicated very quickly especially with multiple buys and sales.

Crypto is too volatile for me and until it actually starts to displace traditional currencies and becomes more than speculative vapour I won’t go near it. But if you are disposed to buy it, do it on a platform that provides good account and cost basis tracking.

Absolutely.  It's for this reason that my investments outside of crypto are only within an ISA along with a few sovereigns/Britannias - all of which are tax free.

Crypto is the only thing I dabble in which attracts tax.  And it's a nightmare.  And that's not mentioning the fact that I've never realised any gains from it whatsoever.

You are hopefully taking advantage of the guaranteed tax benefits of a workplace pension or SIPP.