Declare crypto on Self-Assessment tax return?

1404

Bostonerimus1 said:

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.

Absolutely. I have a workplace pension which I take full advantage of and have done for many years.

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.

I wasn't thinking clearly about this last night but just coming to it now. 

If I were to trade all my BTC, XLM and XRP now for, say, DOGE, wouldn't I still have to go back through all my historic transactions to see where that money came from?

And if not, then with my current holdings of BTC, XRP and XLM, do I only have to go back to the cost of buying those actual coins and not the coins before them all the way back to the cash?

If it's only a case of finding a base price for the coins I have and no further back than that then it's possibly not a massive job. 

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.

I wasn't thinking clearly about this last night but just coming to it now. 
If I were to trade all my BTC, XLM and XRP now for, say, DOGE, wouldn't I still have to go back through all my historic transactions to see where that money came from?
And if not, then with my current holdings of BTC, XRP and XLM, do I only have to go back to the cost of buying those actual coins and not the coins before them all the way back to the cash?
If it's only a case of finding a base price for the coins I have and no further back than that then it's possibly not a massive job.

If you don't currently hold any DOGE and haven't in the last 30 days, then the base cost of this acquisition will depend solely on the purchase you make. Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal. Then if you are certain that your combined holdings of BTC, XRP and XLM haven't gained as much as £3k during this round of holding them, those disposals aren't reportable and you have a clean slate. But you would need to be sure that you didn't, for example, crystallise £6k losses in earlier tax years, followed by £3k+ gains this tax year. And you would need to be willing to give up any losses in earlier tax years that you could have carried forward to use against future gains.

If you do go back, then for each coin, you would need to go back as far as a date where you had zero holdings for a 30+ day period. Again, if you are willing to forfeit any prior losses that could be used to offset later gains.

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.

I wasn't thinking clearly about this last night but just coming to it now. 
If I were to trade all my BTC, XLM and XRP now for, say, DOGE, wouldn't I still have to go back through all my historic transactions to see where that money came from?
And if not, then with my current holdings of BTC, XRP and XLM, do I only have to go back to the cost of buying those actual coins and not the coins before them all the way back to the cash?
If it's only a case of finding a base price for the coins I have and no further back than that then it's possibly not a massive job.

If you don't currently hold any DOGE and haven't in the last 30 days, then the base cost of this acquisition will depend solely on the purchase you make. Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal. Then if you are certain that your combined holdings of BTC, XRP and XLM haven't gained as much as £3k during this round of holding them, those disposals aren't reportable and you have a clean slate. But you would need to be sure that you didn't, for example, crystallise £6k losses in earlier tax years, followed by £3k+ gains this tax year. And you would need to be willing to give up any losses in earlier tax years that you could have carried forward to use against future gains.

If you do go back, then for each coin, you would need to go back as far as a date where you had zero holdings for a 30+ day period. Again, if you are willing to forfeit any prior losses that could be used to offset later gains.

Please could you explain this bit as not sure what you mean exactly:

"Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal."

masonic

1404 said:

Please could you explain this bit as not sure what you mean exactly:

"Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal."

I just mean buy all of your DOGE in a single transaction. It isn't that important, but would mean you don't have to combine multiple purchases into an average base cost. You can then HODL until it goes to the moon and have a very simple calculation on the other side.

1404

masonic said:

1404 said:

Please could you explain this bit as not sure what you mean exactly:

"Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal."

I just mean buy all of your DOGE in a single transaction. It isn't that important, but would mean you don't have to combine multiple purchases into an average base cost. You can then HODL until it goes to the moon and have a very simple calculation on the other side.

So I only need the base cost of the coins I hold at any particular time? Not go further back than that? And this means that I can tell HMRC that base cost when I sell so that we can easily figure out what CGT I might owe?


Really don't want to sell my XRP and XLM right now. I've waited years for them to move and now they finally are. Although I do also like the thought of reducing my exposure to crypto. I should never have put £18.8k into it. I got carried away in late 2021 when the market was flying. I should have capped my exposure at £10k. I'd quite like to get some money out asap before it all goes back down. 

masonic

1404 said:

masonic said:

1404 said:

Please could you explain this bit as not sure what you mean exactly:

"Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal."

I just mean buy all of your DOGE in a single transaction. It isn't that important, but would mean you don't have to combine multiple purchases into an average base cost. You can then HODL until it goes to the moon and have a very simple calculation on the other side.

So I only need the base cost of the coins I hold at any particular time? Not go further back than that? And this means that I can tell HMRC that base cost when I sell so that we can easily figure out what CGT I might owe?


Really don't want to sell my XRP and XLM right now. I've waited years for them to move and now they finally are. Although I do also like the thought of reducing my exposure to crypto. I should never have put £18.8k into it. I got carried away in late 2021 when the market was flying. I should have capped my exposure at £10k. I'd quite like to get some money out asap before it all goes back down. 

No, because of the bed & breakfasting rules. You need a 30 day period where you did not hold the coin in order to break the chain. Otherwise the previous transactions must be taken into account when calculating your base cost for a particular coin, because your current coins will be part of the same pool of coins as the previous ones.

masonic

I am having doubts that you should be so sure you are not carrying a gain above the CGT limit at the moment anyway. Just checking the data you provided on the previous page for XLM, you purchased 1072 units @ £295 and 13676 units @ £2995. That makes your base cost 22p/unit for your pool of 14748 units (not including any you hold elsewhere). The current unit price is 40p/unit, so you are carrying a gain of £2,649 just for this coin alone.

There is no mention of XRP in your table, so I don't know when you acquired those. But if it was after 2022, then bear in mind it has gone up 200% in the past year, so it is likely you'd be sitting on a large gain there too.

Have you got sufficient losses crystallised in this tax year from your SHIB/BTC etc to offset those gains? If not, you will need those crystallised losses from earlier tax years, meaning you will need to quantify and declare them in a manner HMRC will accept. Otherwise you may end up overpaying CGT.

1404

masonic said:

I am having doubts that you should be so sure you are not carrying a gain above the CGT limit at the moment anyway. Just checking the data you provided on the previous page for XLM, you purchased 1072 units @ £295 and 13676 units @ £2995. That makes your base cost 22p/unit for your pool of 14748 units (not including any you hold elsewhere). The current unit price is 40p/unit, so you are carrying a gain of £2,649 just for this coin alone.

There is no mention of XRP in your table, so I don't know when you acquired those. But if it was after 2022, then bear in mind it has gone up 200% in the past year, so it is likely you'd be sitting on a large gain there too.

Have you got sufficient losses crystallised in this tax year from your SHIB/BTC etc to offset those gains? If not, you will need those crystallised losses from earlier tax years, meaning you will need to quantify and declare them in a manner HMRC will accept. Otherwise you may end up overpaying CGT.

Even if my coins go up to £100k this evening, I surely don't owe any CGT unless I sell them? 

Either way, I will hopefully today find a base cost of the coins I hold. Not had chance to look yet. 

1404

masonic said:

1404 said:

masonic said:

1404 said:

Please could you explain this bit as not sure what you mean exactly:

"Doing it in a single transaction, for example via consolidation into XRP, cash, or whatever would give the lowest costs, would be the ideal."

I just mean buy all of your DOGE in a single transaction. It isn't that important, but would mean you don't have to combine multiple purchases into an average base cost. You can then HODL until it goes to the moon and have a very simple calculation on the other side.

So I only need the base cost of the coins I hold at any particular time? Not go further back than that? And this means that I can tell HMRC that base cost when I sell so that we can easily figure out what CGT I might owe?


Really don't want to sell my XRP and XLM right now. I've waited years for them to move and now they finally are. Although I do also like the thought of reducing my exposure to crypto. I should never have put £18.8k into it. I got carried away in late 2021 when the market was flying. I should have capped my exposure at £10k. I'd quite like to get some money out asap before it all goes back down. 

No, because of the bed & breakfasting rules. You need a 30 day period where you did not hold the coin in order to break the chain. Otherwise the previous transactions must be taken into account when calculating your base cost for a particular coin, because your current coins will be part of the same pool of coins as the previous ones.

To be clear, I need to go back to when I originally bought the BTC, XRP and XLM I currently hold and find the base cost (ensuring that no previous holdings existed within 30 days of those purchases)?