Declare crypto on Self-Assessment tax return?

masonic

1404 said:

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. 

No, you will only owe CGT when you sell them. So if you plan never to sell, or hold them until they go down to zero, then you needn't worry. But I am assuming that you plan to sell them at some point, and many will be looking to the near future to take some profits before the next crash.

1404 said:

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)?

Correct, you should be able to work backwards and quickly identify a 30 day void period for each specific coin. Then you can work forward from that date for each coin, listing each purchase and each disposal. Your purchases will give you a running total units and acquisition cost (running base cost per unit = total acquisition cost / total units), while your disposals will involve cancelling the appropriate number of units while maintaining the same base cost.

Once you have the formulas set up in a spreadsheet and have checked them for a few lines of transactions, it will be as simple as filling down for your full transaction list and for other coins. The key will be making sure you get all transactions across all platforms.

1404

masonic said:

1404 said:

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. 

No, you will only owe CGT when you sell them. So if you plan never to sell, or hold them until they go down to zero, then you needn't worry. But I am assuming that you plan to sell them at some point, and many will be looking to the near future to take some profits before the next crash.

1404 said:

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)?

Correct, you should be able to work backwards and quickly identify a 30 day void period for each specific coin. Then you can work forward from that date for each coin, listing each purchase and each disposal. Your purchases will give you a running total units and acquisition cost (running base cost per unit = total acquisition cost / total units), while your disposals will involve cancelling the appropriate number of units while maintaining the same base cost.

Once you have the formulas set up in a spreadsheet and have checked them for a few lines of transactions, it will be as simple as filling down for your full transaction list and for other coins. The key will be making sure you get all transactions across all platforms.

I can't determine the base price for the 3 coins I hold.  It's just not possible.  I can't even get a transaction history from Coinomi (where I believe I bought my XRP because it had been de-listed by Coinbase). 

I need to wipe the slate clean and I would also like to take some cash out of crypto at the same time.  Having put in £18.8k, and now the portfolio being £15.6k I think now is the time to de-leverage a bit.

Any suggestions?

masonic

You can sell £3k for sure without knowing your base cost. Starting from a definite overestimate of gain based on a base cost of zero.

If you have a coin where you can calculate a base cost above the current price, then you can sell that to create a known loss within the tax year and increase that £3k.

You can improve on your zero estimate of base cost by finding the lowest possible price during the period you were buying and use that instead of zero.

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.

This is what I need to do.  And yes, I am certain that I haven't made £3k during this round of holding BTC, XRP and XLM.

See below the image I put on the OP of this thread showing that I put £13k into crypto in October 2021.  And then look at the monthly value of my crypto portfolio from October 2021 until the current date.

Some of that loss is for reasons other than a bear market.  Luna (LUNC, Luna Classic) dropped by 99%.  So I threw £2k at it expecting bounceback.  Then it dropped by ANOTHER 99%.  My £2k turned into £65!  It then recovered to about £300 where it stayed until recently and I finally gave up on it and converted it to BTC.

November 2024	£15,515
October 2024	£5,003
September 2024	£5,119
August 2024	£4,729
July 2024	£5,400
June 2024	£4,685
May 2024	£5,284
April 2024	£5,033
March 2024	£6,322
February 2024	£6,279
January 2024	£5,281
December 2023	£6,386
November 2023	£6,075
October 2023	£6,158
September 2023	£5,471
August 2023	£5,252
July 2023	£7,052
June 2023	£5,262
May 2023	£5,233
April 2023	£5,309
March 2023	£6,239
February 2023	£4,911
January 2023	£5,027
December 2022	£4,235
November 2022	£5,070
October 2022	£6,429
September 2022	£7,080
August 2022	£5,045
July 2022	£5,409
June 2022	£4,642
May 2022	£6,802
April 2022	£10,282
March 2022	£12,803
February 2022	£10,971
January 2022	£9,820
December 2021	£13,851
November 2021	£18,814
October 2021	£21,438
September 2021	£3,869
August 2021	£3,560
July 2021	£1,047
June 2021	£1,065
May 2021	£1,866
April 2021	£1,991
March 2021	£1,990
February 2021	£991
January 2021	£14
December 2020	£0
November 2020	£7,676
October 2020	£5,696
September 2020	£4,617
August 2020	£4,985
July 2020	£4,727
June 2020	£4,006
May 2020	£4,214
April 2020	£4,036

masonic

As has been mentioned before, the total value of your account is irrelevant when determining the capital gain you may or may not have if you sell assets within your portfolio. The £3.3k of XLM you itemised earlier has almost doubled in value, so if you sold £6k of that you'd be at risk of being over the allowance depending on your other trades. Losses you crystallised in earlier tax years through trading cannot be used unless you can quantify them and report them to HMRC.

Unless you are saying that since late 2021 up to April 2024 you have sat on your hands and not exchanged anything.

1404

masonic said:

As has been mentioned before, the total value of your account is irrelevant when determining the capital gain you may or may not have if you sell assets within your portfolio. The £3.3k of XLM you itemised earlier has almost doubled in value, so if you sold £6k of that you'd be at risk of being over the allowance depending on your other trades. Losses you crystallised in earlier tax years through trading cannot be used unless you can quantify them and report them to HMRC.

Unless you are saying that since late 2021 up to April 2024 you have sat on your hands and not exchanged anything.

Yes, I have traded in the two years between late 2022 and late 2024.  A very quick calculation: I would estimate it to be between £15k-£20k of buying/selling/converting in those two years.  

Another thing that makes working out base cost harder is when you buy coins with BTC in exchanges.  So you'd need to figure out how much GBP the BTC was worth on that day to get a GBP price of the transaction?  NIghtmare.


I need to wipe the slate clean for HMRC reporting purposes because I cannot present anything meaningful to them.  So I need to cash out £3k, and then buy a coin (or coins) freshly and then I'll have the base cost saved.  This is the answer?

The problem with that right now is that XRP and XLM are finally performing.  But of course, that can change...

1404

masonic said:

As has been mentioned before, the total value of your account is irrelevant when determining the capital gain you may or may not have if you sell assets within your portfolio. The £3.3k of XLM you itemised earlier has almost doubled in value, so if you sold £6k of that you'd be at risk of being over the allowance depending on your other trades. Losses you crystallised in earlier tax years through trading cannot be used unless you can quantify them and report them to HMRC.

Unless you are saying that since late 2021 up to April 2024 you have sat on your hands and not exchanged anything.

Yes, you are right about the XLM price.  My overall holdings right now are somewhat approaching what I paid for them (which I know isn't relevant for tax purposes, but for me personally it is):

BTC	£3,272
XRP	£6,358
XLM	£7,200

Is converting to cash within Coinbase (and not taking the cash out of Coinbase) something which will be relevant to CGT?

masonic

You will need to look at the assembled data for each coin and decide what you know and what you don't. If you have complete records for any of your coins, then those can be excluded from your slate-wiping. Safest approach for the others is to limit yourself to disposing of £3k across them per tax year. But if you have anything you can sell for a quantifiable loss, then that will give you additional headroom to sell the unknowns. When trading into a different coin, you'd need to choose one of your known coins or one you've had no holdings in for the last 30+ days. Over time, you would then reduce the unknowns to nothing.

1404

masonic said:

You will need to look at the assembled data for each coin and decide what you know and what you don't. If you have complete records for any of your coins, then those can be excluded from your slate-wiping. Safest approach for the others is to limit yourself to disposing of £3k across them per tax year. But if you have anything you can sell for a quantifiable loss, then that will give you additional headroom to sell the unknowns. When trading into a different coin, you'd need to choose one of your known coins or one you've had no holdings in for the last 30+ days. Over time, you would then reduce the unknowns to nothing.

Thank you very much for all of your help, patience and time.  You're brilliant.  It's much appreciated!

eskbanker

1404 said:

Is converting to cash within Coinbase (and not taking the cash out of Coinbase) something which will be relevant to CGT?

Just to pick up on this question, yes, 'converting to cash' is what would generally be known as 'selling', and is therefore very much an asset disposal for CGT purposes.