Crypto trading tax UK

[Anonymous No.20963787]

How much of a faggot is HMRC going to be when I submit my tax return in August?

I regularly trade BTC/ETH and others daily. Multiply this for a year and this will be at least a couple of thousand trades. Am I going to have to work out capital gains and expenses (losses on assets relative to FIAT) on every trade or can I just declare the majority of this trading as taxable income (and be taxed higher).

I'd like ideally to be able to just show what my net deposit and withdrawal of her majestys cuck coin has been to my exchange, plus the total value of my crypto assets at the end of the tax year.

What's the easiest way of sorting this out and what will lead to the lowest tax bill

Not considering emigrating as a way out as i'm going to make at best 6 figures this year unless crypto mcap does a 20x or something like that.

[Anonymous No.20963887]

>>20963787

britbong here. im gonna pay zero tax after i make 7 figures.

fuck the tax man and the paedo royal family

[Anonymous No.20963943]

>>20963787
UK fag here that declared crypto for the 2017/18 tax year.

I used the website cointracking.info. Just enter as much as you can in there... In the future, you should make sure the information is updated as you trade.


-------

You will want to be declaring it as Capital Gains tax. Very low tax rate compared to income tax (income tax also includes national insurance etc).

Also with income tax, if your turnover is over £85k you would have to register for VAT which is a massive hassle.

-------

I declared through a good accountant, might help but can't say for sure. Most the actual accounting happens through the cointracking website but I feel it is good to have an accountant managing the interactions with HMRC.

[Anonymous No.20963977]

>>20963943
>2017/18 tax year.

Also 18/19.

[Anonymous No.20964203]

>>20963787

One other thing.

If you have other income from being employed or self employed it might help. Because that is differentiated as your income, and crypto is on the side as investments. So when you file your taxes you will have two submissions, one for income tax and the other for capital gains tax.

If you only have a submission for capital gains tax, perhaps that might raise some suspicions that it is actually your work income instead of investments.

[Anonymous No.20964249]

>>20963787

Also another cool thing with capital gains tax, you get another £12k tax free allowance. So theoretically you can get £24k tax free if you are also getting income from work.

[Anonymous No.20964375]

>>20964249
can you not say your occupation is a crypto trader, claim 12k free on capital gains, and then again on income

(assuming you have no job)

[Anonymous No.20965077]

>>20964375

So splitting your crypto earnings into two parts? I think that would fall apart under any scrutiny by HMRC.. Technically you can do anything with taxes, write whatever you want.. The only question is what will happen once your taxes are scrutinized.

[Anonymous No.20965110]

>>20964375

Hmm, maybe if you were to have a long time portfolio and a short time portfolio? Cant say for sure. Best to get advice from an accountant.

[Anonymous No.20965180]

>>20964375

When considering whether something is an investment or income. You have to defer to the badges of trade

https://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2011/august/badges-of-trade.html

If it falls within much of the badges of trade it is considered income instead of an investment.

[Anonymous No.20965190]

>>20964203
Yea i'm making minimum wage in a part time job. I've made my annual salary in about 6 weeks with crypto. I'd quit but it has its benefits

Gonna save this thread before its archived. Good info.

>>20963943
>>20963977
Out of curiosity, how much did you make and what was your initial investment? A friend of mine walked away with 100x on a £3k investment just for buying neblio...

[Anonymous No.20965400]

>>20963943
When's the deadline for declaring purchases? Do you have to declare when you buy or only when you cash out?

Experiences cashing out? Do you know if they actually care about the trades, or do they just take your word for it?

[Anonymous No.20965407]

>>20965190
Britbong here if i may ask how did your friend deal with taxes and how did he cash out?

[Anonymous No.20965443]

>>20963787
Lose a bunch of (paper) money then claim your gains against it.

[Anonymous No.20965484]

>>20965190

Sounds all good for capital gains.

Not a massive amount like 40k with holdings from 2013. Only put around £100 of actual money in during 2013.

>>20965190
>A friend of mine walked away with 100x on a £3k investment just for buying neblio...

Epic, I hope to pull something like this off next time around.

[Anonymous No.20965512]

Lucky i cant be taxed om my crypto gains. As a status native american all income made on reservation is considered non taxable wealth. As my crypto gains are technically owned by a company (owned by me) that is incorporated on reservation. Im actually thinking of setting something like a swiss bank up for north americans. Since its a loophole that can only be solved by the tribal council and my family controls it on our reservation.

[Anonymous No.20965535]

>>20963787
https://www.coingecko.com/en/coins/shiba-inu

FUCK YOUR SCAM I PUT MY 30K SAVINGS FOR AT LEAST 2X

FUCK YOUR SCAM
FUCK YOUR SCAM
FUCK YOUR SCAM
FUCK YOUR SCAM
FUCK YOUR SCAM

[Anonymous No.20965601]

>>20965400

Any cash to crypto transaction is irrelevant to taxes until you either sell the crypto for cash or trade it for another crypto.

Yes I have cashed out and traded crypto to crypto (which counts as cashing out each trade). I have declared this and paid my taxes.

In terms of if they care about trades, yes. What matters is that you have all the correct information information and therefore know the correct amount of tax owed. As long as you know the correct amount of tax owed you are fine.

[Anonymous No.20965743]

>>20965601
>Yes I have cashed out and traded crypto to crypto (which counts as cashing out each trade). I have declared this and paid my taxes.
Can you give more info on how you did it?
When do I need to declare my purchases?

>What matters is that you have all the correct information information and therefore know the correct amount of tax owed
But how does it work? Do you tell them how much tax you owe and they take your word for it or do you need to send them spreadsheets of trades?

Thanks anon

[Anonymous No.20965849]

>>20965407
he paid an accountant £5000. In terms of cashing out I just know that he held after the crash and 300k is what he had. He had £6million at the top but was holding out for £10 mil so he says.

>>20965535
fuck doge and that scamcoin. This is my dog, I decided to post it instead of trannys or men.My pepe collection is small.

[Anonymous No.20965998]

>>20965743

I inputted all of the information into cointracking.info (I paid for a membership). The information can be imported via either trade history files downloaded from exchanges or automatically updated from exchange API keys. Some data may need to be manually entered. As some of my data was from 2013 it was a bit choppy, so not perfect (just meant I paid more tax than I owed in the end as I had limited buy side information from early on).

You declare a purchase of crypto when the purchased crypto is either sold for cash or traded for another crypto (or disposed of in another way such as being given away as a gift).

Ahh I see. On the cointracking.info website that I use, you can automatically create a complete tax report by the click of a few buttons. This file is what I gave to my accountant.. Having said that the only thing my accountant was really interested in was the total capital gain made so that is just a singular figure.

Now, it is true that you end up giving the government a single figure and they take your word for it to begin with.. But the issue is that they may choose to scrutinize your tax report, at this point you will be expected to provide the evidence that substantiates your reported capital gain (which will need to include your trade/purchase record).

No problem man.

[Anonymous No.20966130]

>>20963787
Daily reminded that HMRC commission these shill threads.

Crypto was designed to remove any third party jurisdiction over your currency

If you're smart and determined you WILL find a way to avoid paying tax.

[Anonymous No.20966203]

>>20966130

The trouble comes in when you want to use the cash gained for purchasing something like a house or putting it through your bank account. You can't just buy a house out of nowhere without trouble.

[Anonymous No.20966273]

>>20966203
You can if you are a corrupt politician from another country. Remember that £80m mansion some woman was living in which was the target of the first unexplained wealth order and fuck all happened? One rule for them.

[Anonymous No.20966321]

>>20966203
sollicitors for house purchases need to verify source of funds, but i guess you can do it yourself somehow.

I will certainly look into tax mitigation for crypto but im not gonna just do what someone on 4chan says, it'll take real work

[Anonymous No.20966386]

>>20966203
Agreed. So never do that.

What about using gains as collateral for a loan? Loans are tax free right?

[Anonymous No.20966406]

>>20963787
It’s funny how the Panama papers revealed that virtually every politician and wealthy person in your country and all over the world paid nothing on their gains and the only outcome of this information leaking was that the reporter who did so was murdered. On top of that many of the wealthiest of these individuals are literal demonic pedo vampires. But despite all this cucks like you are begging to pay up. For fucks sake the money just goes into a black hole while imaginary funds are spent ruining your life in every possible way. Keep YOUR money. It’s YOURS. Crypto is supposed to be your escape hatch.

[Anonymous No.20966462]

>>20966273

100% the system is rigged so that the little guy gets rekt whilst the corrupt elite are involved in all sorts of law breaking including financial.

>>20966321

From my perspective I am going to follow the law as I do not want to risk anything.. But I will try to plan my income in such a way that is the best for me, only legally.

[Anonymous No.20966532]

>>20966386

Like a Defi crypto loan? Am not too experienced with this. Loans are tax free of course. Not sure about all the details though.

As for traditional finance loans, I am not sure about using undeclared gains as collateral for a loan.

With stuff like this it is important to be as precise as possible.. That being said I would prefer to do everything by the law instead, only out of fear.

[Anonymous No.20966659]

>>20966406

Yeah the elites are quite literally the most corrupt people in society, biggest tax avoiders out there.. Even politicians fiddle money, Hillary Clinton being a prime example taking tax free money in her foundation for political favors etc, then paying herself a generous wage out of the foundation and paying for living costs etc . Also low level politicians getting large payments for 'conference talks' etc. All bullshit, all money laundering.

I say to follow the law as a little guy because your life can be ruined by these buggers.

[Anonymous No.20966706]

>>20965998
Thank you anon, very useful. Recently purchased crypto.. so I won't need to declare the purchase now but only when i sell for fiat?

How did you go about finding the accountant and how much did you pay? Did HMRC ever reach to you to validate?

[Anonymous No.20966745]

>>20966659
>I say to follow the law as a little guy because your life can be ruined by these buggers.
Ngmi because realistically you will never get there playing by the rules, which is the whole point. Strength in numbers only.

[Anonymous No.20966795]

>>20965512

Holy kek a real indian for once and not a street shitter.

Good luck in your noble endeavours!

[Anonymous No.20966848]

The only people who make these "omg im paying so much taxes on crypto" posts are all CIA glowniggers

Do not pay taxes on crypto EVER

[Anonymous No.20966953]

>>20966706
No problem.

>so I won't need to declare the purchase now but only when i sell for fiat?

Yes your 100% fine if you went cash>crypto only. Even if decades pass. Only when you sell it for cash, trade it for other crypto or dispose of it another way such as a gift to someone.

>>20966706
>How did you go about finding the accountant and how much did you pay?

I had an accountant before already from original income source, but when crypto came in and everything I decided that the accountant was not capable of helping me in this regard so I wanted to find a new accountant. I knew someone else that had a good experience with another accountant that had a more professional organization (not just a 1 man operation but an office with several people) and decided to go with them.

I pay my accountant around £470 if I remember correctly (for both my income tax and capital gains tax).

The accountant has been very useful for various reasons, one of them being keeping track of my national insurance payments (knowing when I am owed a refund for payment on account etc). Apparently a lot of people over-pay their national insurance due to difficulty keeping track of what is owed for refunds etc, HMRC will not let you know if you over pay generally.

>>20966706
>Did HMRC ever reach to you to validate?

No I haven't heard from them. I have declared two taxes years of crypto capital gains so far and about 6 years of income tax.

[Anonymous No.20967005]

>>20966745

You will be risking your personal security but I get it of course. I think the main goal should be that people like Bill Gates and Les Wexner are arrested and perhaps have all of their assets seized.

[Anonymous No.20967171]

Damn, how does this play out when you log all the crypto-crypro transactions?

Let's say you traded 0.1 BTC to 5ETH 2 months ago, do you need to include the fiat amount that was traded (at the price of the pound to crypto 2 months ago) or the current price?

I might just be fine taking our 11k tax free every year.

[Anonymous No.20967996]

>>20967171

Yes you need a record of the fiat amount at the time of trade.. This is automated using websites such as cointracking.info.. Otherwise its pretty much impossible to do your crypto taxes.

[Anonymous No.20968006]

>>20966953
Thanks again anon, great info.
Just one last question. I have some money in crypto that basically comes from 2017 investments. Did loads and loads of trades since then. Some good some bad. Think I started with $400 and now its $2000. How should I deal with that? Any tips?

[Anonymous No.20968738]

>>20968006

No problem man.

Technically you would need to enter all of your trades into some accounting website/software and then create tax reports for each tax year, then you would need to file late reports for each of the tax years.

If America is anything like the UK in this regard, you would only owe tax on any of those years if the gains was above around £12k.

People sometimes run into issues with crypto due to getting large gains from crypto to crypto trades and then the crypto they hold goes down in value a bunch leaving them with a big tax bill and crypto that is not worth much.

[Anonymous No.20968879]

>>20968738
So I should probably try to trade that to up to £12k then cash that out? Since no one would ask any questions there. Then, the following financial year, I could cash out the new investments and pay that on that? Would that work?

[Anonymous No.20968912]

>>20963887
You cant. They know you bought. You can't hide from the taxmen. You are all fucked cryptocucks.

[Anonymous No.20968947]

>>20968006
>>20968738

If your gains each year were negligible/below the tax limit (when taking into account crypto to crypto 'fiat value of crypto at time of trade' gains) then it will not be such a big deal. Just a matter of providing proper records to the tax agency.

Also, it will matter as you move forward to have the correct records.

For instance how will you be able to keep track of your gains in the future if you have no record of the cost basis of the crypto you have sold?

Plus it can be good to have trade records as the government could assume your gains/crypto are illegitimate without records.

-----------------

It is hard to give precise advice here, the technically correct thing is:

>>20968738
>Technically you would need to enter all of your trades into some accounting website/software and then create tax reports for each tax year, then you would need to file late reports for each of the tax years.

But I understand that this might take a lot of work. It might be worth speaking to accountant. If the gains are little/below the tax limit you might want to fudge your way through somehow without having to do the work of going several years of trades.

[Anonymous No.20969081]

>>20968879

So consolidating the outcome of several years of trades into a capital gain below the tax threshold in order to avoid reporting all of your trades? Might be ok.

[Anonymous No.20969124]

>>20968947
accountants have no fucking idea about crypto lmao

just lol at having to have records of shitcoins traded in exchanges that are dead and shit, hardforks, mining from dead coins and other crazy uniswap tier insanity. no gov official will know wtf you are talking about if you were to present that info. its over for cryptocucks

[Anonymous No.20969175]

>>20968738
>People sometimes run into issues with crypto due to getting large gains from crypto to crypto trades and then the crypto they hold goes down in value a bunch leaving them with a big tax bill and crypto that is not worth much.


i remember reading some guy went bankrupt because of this

how the fuck could you owe taxes from unrealized gains?

[Anonymous No.20969319]

>>20969175
>how the fuck could you owe taxes from unrealized gains?

They count trading a crypto for a crypto as though it was trading crypto for cash (value of the crypto in fiat at the time of the crypto-crypto trade). It is awful. To be fair I am not sure how else you could figure out a cost basis when doing lots of crypto trades, might be possible but very complicated.

>>20969124

Yeah most of the accounting is done in the software/website you use. The accountant just does the final touches etc, not much. Some accountants are specialized in crypto though.

[Anonymous No.20969354]

Why are you mainland faggots not hiding your money in shell companies in jersey like everyone else? It’s also nice and sunny and covid free here, pop on over.

[Anonymous No.20969395]

>>20963787
With that many trades I'm pretty sure it will count as trading income rather than cgt.
Info on the differences is on the hmrc website
In 2017 i just paid cgt but I'd only made a handful of trades spread out over months

[Anonymous No.20969497]

>>20965849
>£6million at the top but was holding out for £10 mil so he say
My God I'd be so bummed.

[Anonymous No.20969564]

>>20968947
>>20969081
Or maybe I could just move that money to revolut? What stops me from using a bitcoin atm?

[Anonymous No.20969660]

>>20969564

Then it is just a matter of whether you can be tracked/caught. Which is the same for all income taxes.

[Anonymous No.20969699]

>>20969564

I recommend to do things by the law due to personal safety.

[Anonymous No.20969755]

>>20969564

Might be worth speaking to a good accountant, even briefly for advice.

[Anonymous No.20969833]

>>20969564

I don't think you have to worry or anything, especially if the gain is 1-2k. If you plan on making large gains it is important to have all your ducks in a row so that you have all the correct records etc. With crypto it is good to keep records as you move forward. With websites like cointracking.info you can automate your record keeping for example by 'plugging it' into exchange API's.

[Anonymous No.20969929]

>>20969660
Fair enough.

So let me recap my situation. I invested some money in 2017 which went from around £400 gbp then to £1600 now through many trades (some bad some good). So well below the tax allowance. Those funds are on binance.

Now I invested around £8k fresh fiat recently in the last couple of months.(I converted gbp to eur on revolut then sent euro to coinbase, is that taxed too btw, gbp to euro?) Anyway this is a sum I am holding with no trades whatsoever and will cash out during the bullrun. I obviously plan to pay all taxes on this investment, and should be relatively easy given that I'm just holding them.

Now what I'm not sure about is what to do with the first sum? The £1600 on binance? Should I cash that out to my bank account via revolut and then re invest it or is that like "cleaning" it? Any suggestions?

Thanks again

[Anonymous No.20970023]

By cashing out the small sum and re investing it I would effectively erase the past trade history, which would save loads of unnecessary headaches given that the sum is small anyway

[Anonymous No.20970426]

>>20969929
>is that taxed too btw, gbp to euro?

Not taxed now, but once you transfer that euro back to gbp or crypto it would be taxed I would think.

>>20969929
>I obviously plan to pay all taxes on this investment, and should be relatively easy given that I'm just holding them.

It will be important to keep good records moving forward and some way of crypto-accounting like cointracking.info. It is a lot harder to retrospectively do crypto accounting than if you do it as you go along.

>>20969929
>Now what I'm not sure about is what to do with the first sum? The £1600 on binance? Should I cash that out to my bank account via revolut and then re invest it or is that like "cleaning" it?

It is a bit of a fiddly one. What is missing are the tax reports for the previous years for that amount. (might not be that big a of a deal if the amounts are small like 1k-2k, determined when calculating crypto-crypto trades etc).

In terms of the what is relevant for the next tax year, all you would need is the 'cost in basis' for the crypto you trade for fiat/cash in that year. These 'cost in basis' figures would be what you would have from the previous trade history.

[Anonymous No.20970700]

>>20969929
>Now what I'm not sure about is what to do with the first sum? The £1600 on binance? Should I cash that out to my bank account via revolut and then re invest it or is that like "cleaning" it? Any suggestions?


-------------

This is probably most relevant post.

I was in a similar position to you. I had done some crypto trading etc in 2013 (totaling a relatively small amount well below the tax limit) and then didn't touch it for years and cashed out that old crypto in 2017/2018.

I hadn't filed taxes for 2013 and the records were very limited. I pieced together what I could from that period for my 2017/18 tax filing cost in basis etc but the figures were scarce. --- All this meant was that I had limited data for my 'cost in basis' for my sale of crypto in 2017/18.. --- So the result was that I barely any 'cost in basis', so I ended up paying more tax than I owed.

------------------------------

A POTENTIAL SOLUTION for your situation ========== You could cash out that £1600, then as you cant get records for the 'cost in basis', you void the 'cost in basis'. Then it is 100% profit, as though you got £1600 for £0 investment. This will not matter as it well below the tax limit.

[Anonymous No.20970834]

>>20969929
>Should I cash that out to my bank account via revolut and then re invest it or is that like "cleaning" it?
>>20970023
>By cashing out the small sum and re investing it I would effectively erase the past trade history, which would save loads of unnecessary headaches given that the sum is small anyway

I think perhaps cash out the small sum and count it as 100% profit due to not being able to find the 'cost in basis'.

The only trouble with re-investing, there is a tax law in the UK 'bed and breakfasting' https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13370

This could make previous trades relevant which is what you want to remove.

[Anonymous No.20970952]

>>20965512
horrendously based

[Anonymous No.20971005]

>>20969929

I am sorry I am quite tired now and struggling to keep coherent.

-----------

As you mention it is a negligible amount tax wise, there will be ways to declare it without having to get all of your trade history. (voiding 'cost in basis' due to lack of records which is perfectly legitimate).

--

The trouble comes in when trying to make a 'clean break' from this and moving forward with the 8k etc. Stuff like this is important >>20970834
>The only trouble with re-investing, there is a tax law in the UK 'bed and breakfasting' https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13370

[Anonymous No.20971094]

What if you made a ton of money and moved to jersey or Gibraltar and then cashed out. Do you just keep it all or still pay as you lived in England when you actually made the money?

[Anonymous No.20971133]

>>20966386
>What about using gains as collateral for a loan? Loans are tax free right?

i’m not totally sure if this is an actual thing you can do, but you *might* be able to transfer it to a company, loan it to another company you are director of with 99 years till payment is due and then take dividends from that company. obvs i’m not an accountant or even clued up on this shit, it’s probably something i overheard down the pub.

[Anonymous No.20971170]

>>20965512
Dangerously based.
T. Britbong. (Sorry my ancestors invaded your land and became what is now the U.S government, give em hell.)

[Anonymous No.20971239]

>>20969175
if that happens why the fuck would you declare it lol

[Anonymous No.20971323]

>>20969929

To reiterate, possible action plan:

1. Don't worry about previous tax years if they are well below tax limit.

2. Count the total £2000 cashed out as 100% profit (citing that you cant get records of 'cost in basis').

3. Somehow make a clean break when making next investments, taking into account 'bed and breakfasting' laws in the UK.

4. Keep good records moving forward on accounting software such as cointracking.info.

[Anonymous No.20971382]

>>20969929

As with all my advice, I would advise getting advice from a good accountant. I am trying my best here but I will not necessarily have it all straight.

[Anonymous No.20972099]

>>20966203
>cointracking.info

what if you already have a mortgage ? how would they know? large deposit into your account flag up on thier systems?

[Anonymous No.20972298]

>>20972099
I think that banks flag large transactions. Also they might scrutinize your account just because.

When there is a record of more outgoing cash than you are getting through income etc, it is just a matter of some scrutiny then the money needs to be explained.

[Anonymous No.20972578]

>>20972298
i imagine the only way to avoid it would be to take out an amount under 12500 per financial year.

[Anonymous No.20972677]

>>20972578

Yeah that is one way that is also completely legal.

[Anonymous No.20972689]

>>20963787
>crypto
>tax

[Anonymous No.20972804]

i work away in saudi arabia, and as such don't pay tax on my income but contribute nat ins voluntary. what would the legal process be for that i wonder ?

[Anonymous No.20973697]

>>20971094
You have to stay away for 5 years i think or they can claw back taxes if you return