Declare crypto on Self-Assessment tax return?

Scottex99

1404 said:

Thanks, all. I am finally getting my head around it. 

Can anyone recommend an app or software which works out crypto tax? A quick Google reveals that there is one app/site which connects with Coinbase and presumably works it out for you. 

Koinly.

Never used it myself and no idea of the costs but I've heard it mentioned a few times by crypto clients.

In terms of security, Masonic is right, however generally the API you connect has read-only rights, I guess similar to open banking where I can pay my Amex with a few clinks and it's linked to my HBOS account.

1404

masonic said:

Hmm, sounds like a interesting idea to give an app I'd found on the internet access to my financial account.

As mentioned, calculations, especially automated ones, require accurate and complete data, which you don't have, so any result would be highly questionable.

You could just use something set up for shares, as the same principles apply and you should be able to find something more easily.

Absolutely! It's pretty intrusive and fraught with risk.

In recent years, I've used Coinbase for almost everything for the very reason that it's all in one place.

But I've no idea how to get around the fact I have no base price for my coins. I will keep scouring my records. The best I can think of is guessing when I bought them and using the figure from that date. What would HMRC do in that situation?

I do now agree with what you said about my coins being in profit. I think they are. And so I can't sell them or exchanged them without paying CGT. 

All I can do is leave them where they are and fake £3k per year out (unless I bite the bullet and pay tax on them should they moon). Not a bad problem to have. 

In reality they will probably crash soon and I won't have to worry about it.

1404

The US will soon be relaxing tax around crypto. There is an argument that the UK can and will follow suit. So being in too much of a rush to pay HMRC what you owe them may not be beneficial.

At least any gains I have are in this 24/25 tax year. I have a year to pay this tax (should I end up having to). We'll see what happened in that year.

eskbanker

1404 said:

The US will soon be relaxing tax around crypto. There is an argument that the UK can and will follow suit. So being in too much of a rush to pay HMRC what you owe them may not be beneficial.

What's the basis of such an argument?

InvesterJones

eskbanker said:

1404 said:

The US will soon be relaxing tax around crypto. There is an argument that the UK can and will follow suit. So being in too much of a rush to pay HMRC what you owe them may not be beneficial.

What's the basis of such an argument?

I agree it sounds a bit odd - the UK has been *increasing* CGT collection recently, not decreasing it.

1404

eskbanker said:

1404 said:

The US will soon be relaxing tax around crypto. There is an argument that the UK can and will follow suit. So being in too much of a rush to pay HMRC what you owe them may not be beneficial.

What's the basis of such an argument?

Simply that capital will flow the path of least resistance. Does the UK want to be left behind? The tax intake from coming after people like me could be a lot less than the potential gains from making the UK a crypto hub. Or at least, not hostile to crypto.

The UK removed VAT from gold purchases because the EU had done so, iirc?

eskbanker

1404 said:

eskbanker said:

1404 said:

The US will soon be relaxing tax around crypto. There is an argument that the UK can and will follow suit. So being in too much of a rush to pay HMRC what you owe them may not be beneficial.

What's the basis of such an argument?

Simply that capital will flow the path of least resistance. Does the UK want to be left behind? The tax intake from coming after people like me could be a lot less than the potential gains from making the UK a crypto hub. Or at least, not hostile to crypto.

The UK removed VAT from gold purchases because the EU had done so, iirc?

That doesn't seem a particularly credible proposition - if the UK doesn't choose to follow suit, are crypto enthusiasts really likely to emigrate to the US in response to that, to such an extent that the UK would be in any way bothered by them doing so?

Re gold - the UK was part of the EU at the time and therefore subject to a shared regulatory regime....

masonic

The FCA in particular wants to prevent consumers from being exposed to crypto investments, along with other high risk non-mainstream investments. It believes that consumers lack the sophistication to understand what they are getting into, perhaps this thread somewhat proves this point. It has already introduced regulations on banks to this effect. It seems vanishingly unlikely that the tax system would be changed to incentivise the opposite.

Back to reality:

1404 said:
But I've no idea how to get around the fact I have no base price for my coins. I will keep scouring my records. The best I can think of is guessing when I bought them and using the figure from that date. What would HMRC do in that situation?

It has been explained previously that HMRC would expect you to pursue all avenues in trying to reconstruct your records. In the case of crypto, this should be less challenging than for most financial assets, as there is usually a public ledger that can be searched if you know your wallet address. However, records to sometimes get irrecoverably destroyed, for example in a fire, so they do state on their web pages about capital gains, which I'm surprised you haven't read yet:

https://www.gov.uk/capital-gains-tax/records

In estimating any figures, I'd recommend that you err on the side of buying lower and selling higher, perhaps by using the worst case figures that are consistent with what you do know. You certainly don't want to be artificially reducing your tax liability by picking prices that are most favourable for you. Prepare your figures in such a way that you will be comfortable sitting down with a tax inspector and talking though them.

1404

Quick question about this 2024-2025 tax year.

I have gathered the evidence for a loss of -£1530.47 which I can use to offset my tax in 24/25.  This loss relates to purchases of Luna Classic I made in May 2022 and which I converted to BTC on 19 November 2024.

During this 24/25 tax year, the only other disposal of crypto I have made is when I converted £144.41 of STX to BTC on 19 November.  This STX was deposited in my account by the exchange two years ago and I just discovered it.


So the question is: as long as I don't sell/convert/otherwise dispose of any other crypto before 6th April 2025, would I be within my rights to take this much cash out of my crypto portfolio:  £3,000 CGT allowance + £1530.47 - £144.41 = Up to £4386.06 to take without any tax or reporting obligations?


 

masonic

Yes, based on those figures your net gain would be below the allowance and wouldn't need reporting.