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Cryptoasset taxation & banks

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notabikeranym...
Formerly known as
meef



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PostPosted: 11:09 - 07 Dec 2020    Post subject: Cryptoasset taxation & banks Reply with quote

Does anybody know anything about cryptoasset taxation and capital gains?

If you haven't been keeping a log of your transactions but you're in sizeable 5 figure profits, what do you actually do? I've looked into .gov website guidance and reporting capital gains on cryptoassets looks like an absolute mess of a task that would require a full audit of transactions (which I just don't have).

Can't you just wait for the tax man to chase you and pay whatever they ask for no questions asked? Is there a paid accountancy type service that will sort this out for you?

What happens if HMRC chases you about it but you can't provide an audit of your transactions, do you get the money taken off you/frozen or what?

Any legal avoidance (not illegal evasion) tips?

Also when it comes to withdrawing large sums to your bank, what are the risks of your account being frozen?

This whole bloody thing makes you feel like a criminal for having turned over a profit. Any advice from someone who has experience much appreciated.
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Keithy
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PostPosted: 11:21 - 07 Dec 2020    Post subject: Reply with quote

Not read much but one basic bit of advice would be to utilise your annual CGT allowance, I think it’s around £12k atm so if you are up on some deals then you can cash out and buy back in again as you cross the end of a tax year. Bed & breakfasting, it’s called. Keep track of your transactions across the tax year and at least you can point to something to support a zero tax liability.

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Easy-X
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PostPosted: 14:18 - 07 Dec 2020    Post subject: Reply with quote

I suppose it's like having an offshore account: no one knows/cares about it until you try and realise those assets. So as Keithy suggests: don't put more than £12,300 (or £24,600 to use up partner's allowance) into your bank account in one year. How much actual profit has been made is neither here nor there.
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wr6133
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PostPosted: 14:57 - 07 Dec 2020    Post subject: Reply with quote

Just buy a lot of drugs on whatever the Silk Road is called these days?
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notabikeranym...
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meef



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PostPosted: 15:30 - 07 Dec 2020    Post subject: Reply with quote

Cheers for the reply guys. Haha pretty sure Silk Road was taken down a long time ago but I do have a friend who once bought weed with BTC back when BTC was dirt cheap- regrets it now but that's another story.

Wouldn't the bank still find it shady that I've withdrawn £12,300 at a time each tax year? Wouldn't I have to account for that or where it came from or anything without them freezing the balance until I can prove I own it?

Also what if £12,300 worth of crypto assets were cashed out by a relative or other relatives to their own bank accounts? (The original crypto would be completely untraceable to the origin wallet.)

Hmm. Thinking
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Keithy
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PostPosted: 16:36 - 07 Dec 2020    Post subject: Reply with quote

HMRC do treat gains under CGT

https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

Unless you are trading so frequently they view it as your trade or profession. They go to great pains to tell you that you need to declare it and pay the tax on it, but not how they intend to find out how you earned it or where you moved it from and to.

HMRC have a tendency with this stuff to massively over-estimate your liability and stick you with a big bill to put the frighteners on you. Banks are likely to be less concerned about cash coming into your account if it’s linked to something you have already paid out, so cash going out to a brokerage account then coming back is ok, although I don’t claim to know what they are twitchy about in money laundering terms.

With regard to selling and rebuying to use your CGT allowance you would usually leave your cash in your brokerage account, rather than transferring to and from a bank account.
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The Artist
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PostPosted: 17:48 - 07 Dec 2020    Post subject: Reply with quote

Use this to calculate taxes

https://bitcoin.tax/

Then go to https://taxscouts.com/ to find an accountant who can check everything over for you and answer any questions.

Your bank won't care but they will have systems in place that may trigger warnings if you do not usually have large amounts of cash going in and out. Remember in the grand scheme of things, a £12k transfer won't even raise the slightest eyebrow at a bank.

Cashing out via a family member is tax evasion.

When you say untraceable, do you mean Monero or you mean you bought BTC or some other transparent coin with cash in person?

How did you get hold of crypto legally but without any record? If you can't answer, fair enough but almost all legal ways have records and ways of calculating the values on given days.
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Ste
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PostPosted: 21:07 - 07 Dec 2020    Post subject: Reply with quote

Cashing out at the rate of £12,300 worth of crypto assets each year sounds like it would take forever! Laughing
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notabikeranym...
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meef



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PostPosted: 10:44 - 12 Dec 2020    Post subject: Reply with quote

Thanks for the replies lads it's much appreciated.

The Artist wrote:
When you say untraceable, do you mean Monero or you mean you bought BTC or some other transparent coin with cash in person?

How did you get hold of crypto legally but without any record? If you can't answer, fair enough but almost all legal ways have records and ways of calculating the values on given days.


First bought $ETH on coinbase and then transferred it into Metamask, then been flipping ERC20 shitcoins ever since and made bank on a few projects (Got into KP3R at $39, $SMARTRCREDIT at $0.54, $EPAN at $0.16 and $RFI at $0.40) but I kept changing my ERC20 wallets frequently and losing track of my old wallets because I didn't ever once think about tax.

Then I slapped everything into Monero, let that pump a bit, traded it in and out of other coins and back into Monero.

Recently, happy with profits, slapped all my Monero into ETH, traded it into USDT (stablecoin), and that's sitting on a Ledger now.

Now I'm thinking well fuck, what about tax?
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The Artist
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PostPosted: 10:53 - 12 Dec 2020    Post subject: Reply with quote

It is unclear but I wouldn't be surprised if HMRC will want to tax you based on acquiring whatever you got based on a zero cost basis.

Best bet is to speak to an accountant who has crypto experience and knowledge to advise you properly. It is worth the relatively small cost for peace of mind vs randomers on a motorbike forum.
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MCN
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PostPosted: 11:51 - 12 Dec 2020    Post subject: Reply with quote

The Artist wrote:
It is unclear but I wouldn't be surprised if HMRC will want to tax you based on acquiring whatever you got based on a zero cost basis.

Best bet is to speak to an accountant who has crypto experience and knowledge to advise you properly. It is worth the relatively small cost for peace of mind vs randomers on a motorbike forum.


Hoi.... we've helped loads of folk with info on here.

Driveway material, best shed construction methods, central heating issues, even biking matters and etc.

Shifty
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Keithy
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PostPosted: 12:37 - 12 Dec 2020    Post subject: Reply with quote

The Artist wrote:
It is worth the relatively small cost for peace of mind vs randomers on a motorbike forum.


I resemble that remark!

Wink
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notabikeranym...
Formerly known as
meef



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PostPosted: 07:19 - 13 Dec 2020    Post subject: Reply with quote

The Artist wrote:
It is unclear but I wouldn't be surprised if HMRC will want to tax you based on acquiring whatever you got based on a zero cost basis.

Best bet is to speak to an accountant who has crypto experience and knowledge to advise you properly. It is worth the relatively small cost for peace of mind vs randomers on a motorbike forum.


Yeah you're completely right. Going to contact a crypto tax accountant and get this shit paid up tbh, just want to clear it to the bank and I'm sure they can sort me out.
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Keithy
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PostPosted: 12:31 - 13 Dec 2020    Post subject: Reply with quote

Meef wrote:
The Artist wrote:
It is unclear but I wouldn't be surprised if HMRC will want to tax you based on acquiring whatever you got based on a zero cost basis.

Best bet is to speak to an accountant who has crypto experience and knowledge to advise you properly. It is worth the relatively small cost for peace of mind vs randomers on a motorbike forum.


Yeah you're completely right. Going to contact a crypto tax accountant and get this shit paid up tbh, just want to clear it to the bank and I'm sure they can sort me out.


From what you posted in another thread you need to, HMRC might consider crypto your actual ‘trade’ as it is significantly more than what you earn from employment.

Good luck Thumbs Up
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Keithy
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PostPosted: 22:48 - 10 Jan 2021    Post subject: Reply with quote

Just seen an article “Bitcoin holders barred from depositing profits in UK banks”, behind a paywall so not able to check it out but apparently HSBC are not accepting credits from digital wallets.

Might be worth checking out what that’s all about.
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Riejufixing
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PostPosted: 23:13 - 10 Jan 2021    Post subject: Reply with quote

Keithy wrote:
Just seen an article “Bitcoin holders barred from depositing profits in UK banks”, behind a paywall so not able to check it out but apparently HSBC are not accepting credits from digital wallets.

Might be worth checking out what that’s all about.

Add "Bypass Paywalls" to your browser and report back (or just name your source).
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Keithy
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PostPosted: 12:48 - 11 Jan 2021    Post subject: Reply with quote

Article is in the Times. I have just spent 40 mins loading Firefox and attempting to get Unpaywall addon to work on a frikkin’ iPad. I hate Apple Mad
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notabikeranym...
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meef



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PostPosted: 12:52 - 11 Jan 2021    Post subject: Reply with quote

That HSBC news is from 2017. It's just being reiterated because crypto market is on a bullrun. Lots of sensationalist headlines coming out. Can easily cash to bank/paypal and then bank.

Btw still haven't figured out tax, but spoke to a couple tax experts. They also expressed it's always changing & it's new territory. I'll deal with it later.
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The Artist
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PostPosted: 14:36 - 11 Jan 2021    Post subject: Reply with quote

Meef wrote:
That HSBC news is from 2017. It's just being reiterated because crypto market is on a bullrun. Lots of sensationalist headlines coming out. Can easily cash to bank/paypal and then bank.

Btw still haven't figured out tax, but spoke to a couple tax experts. They also expressed it's always changing & it's new territory. I'll deal with it later.


It hasn't changed ever in the UK. It is subject to capital gains and every trade between different crypto is a taxable event.

An accountant with crypto experience will easily be able to tell you about your potential zero cost basis.

I have friends that have used https://taxscouts.com/ for this exact purpose.
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Riejufixing
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PostPosted: 23:19 - 11 Jan 2021    Post subject: Reply with quote

Bitcoin's down by nearly 30%, I see.
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notabikeranym...
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meef



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PostPosted: 03:40 - 12 Jan 2021    Post subject: Reply with quote

In fairness I only rang around to a couple accountancy firms, and it was free advice to see what they thought before purchasing into any of their packages. I'll defo check out tax scouts though, seems handy.

Bitcoin's still up over 80% in the last 30 days and over 300% in the last year though, despite the sensationalist headlines from finance dinosaurs looking to manipulate the market.
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The Artist
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PostPosted: 09:34 - 12 Jan 2021    Post subject: Reply with quote

Riejufixing wrote:
Bitcoin's down by nearly 30%, I see.


Yeah it crashed all the way down to the value it was last Thursday.
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JackButler
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PostPosted: 14:39 - 12 Jan 2021    Post subject: Reply with quote

I make £10 000 a day trading Bitcoin & still can't afford the services of an accountant.
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Easy-X
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PostPosted: 16:53 - 12 Jan 2021    Post subject: Reply with quote

JackButler wrote:
I make £10 000 a day trading Bitcoin & still can't afford the services of an accountant.


Of course... is the air thin up there, in your ivory tower?
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Jmoan
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PostPosted: 20:40 - 15 Jan 2021    Post subject: Reply with quote

Wasn't the whole point to avoid the banking system with this pretend cash?
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