How far back to HMRC go on crypto??

sgx2000

Hi

I first bought Bitcoin in November 2017.
bought it at random, bit at a time.  on Coinbase
Used it in 2018 to buy Ripple (lost a lot) on a different exchange (Gatehub)
In the down market (yes I know ...Dumb) I used ripple to buy back into Bitcoin on Coinbase

I have bought at a few stages over the last few years

My overall investment is approx £7,500
Currently £25,000

1.  If I sold £6,000 would HMRC come after me?
2.  Also If I transfered £6,000 of bitcoin to my wife, can she also take it out?
3.  If I then used the £12,000 to buy more bitcoin is that an issue...

eskbanker

It's your responsibility to make accurate declarations for CGT purposes, and if you don't then obviously you run the risk of HMRC enforcement action.  The annual CGT allowance is now only £3K, so you need to work out your gains and keep them below that figure if you don't want to pay tax, or if you can't do so then you're better to sell no more than £3K worth.

la531983

Why would you cash BTC out just to buy it again, just keep £12k worth of it?

masonic

sgx2000 said:

Hi

I first bought Bitcoin in November 2017.
bought it at random, bit at a time.  on Coinbase
Used it in 2018 to buy Ripple (lost a lot) on a different exchange (Gatehub)
In the down market (yes I know ...Dumb) I used ripple to buy back into Bitcoin on Coinbase

I have bought at a few stages over the last few years

My overall investment is approx £7,500
Currently £25,000

1.  If I sold £6,000 would HMRC come after me?
2.  Also If I transfered £6,000 of bitcoin to my wife, can she also take it out?
3.  If I then used the £12,000 to buy more bitcoin is that an issue...

You've run out of time to declare those earlier losses to HMRC in order to use them to reduce your taxable gains now.

If you are saying that you used £7,500 worth of Ripple to buy the Bitcoin worth £25,000 today (and you have records to support that), then you could sell £4,250 and gift £4,250 to your wife to sell without going over each of your annual allowances. You would need to wait a minimum of 30 days before buying more Bitcoin, or this would not count as a disposal (Bed & Breakfast rules). You'd be better off reinvesting in something different if you plan to sell more in the next tax year.

sgx2000

la531983 said:

Why would you cash BTC out just to buy it again, just keep £12k worth of it?

So that next years capital gain is based on the higher purchase price

Bostonerimus1

sgx2000 said:

la531983 said:

Why would you cash BTC out just to buy it again, just keep £12k worth of it?

So that next years capital gain is based on the higher purchase price

You need to have all the information for your various trades and then you can work out the cost basis and the selling cost and calculate the capital gain. For shares/funds you can either identify individual units you are selling or work out an average cost basis.

EdSwippet

Bostonerimus1 said:
For shares/funds you can either identify individual units you are selling or work out an average cost basis.

Not in the UK. Unlike the US, the UK doesn't allow specific share identification, FIFO, or LIFO; only average cost basis. (Also, the OP never mentioned holding shares or funds, only cryptocurrencies.)

sgx2000

Does hmrc right off capital gains after 7 years?

masonic

sgx2000 said:

Does hmrc right off capital gains after 7 years?

If you conceal capital gains you have made from HMRC, they can go back up to 20 years and penalties range from 30-200% of the tax owed plus interest on the tax owed for the period it went unpaid. If you made capital gains in the past that you should have declared but did not, it would be advisable to own up to them as a mistake as you will be treated more sympathetically than if you are subject to a tax evasion investigation.

Capital gains are only made when you dispose of an asset (and don't buy it back within 30 days). Based on what you wrote in your OP, you have not yet made a capital gain, as all your sales have been at a loss.

If you are asking about taper relief or indexation, then taper relief applies to inheritance tax not capital gains tax, while the current tax system doesn't allow for any indexation of gains - it doesn't matter over how long the gain was accumulated.