Cryptos & UK Tax Advice Professional Sought - Anyone Have a Contact?


#1

Hi All,

Does anyone have any solid Crypto Tax advice or can you suggest a suitable professional accountant in this field?

Obviously, I don’t want to pay any more Capital Gains Tax or other Tax than is necessary. I would appreciate any advice from a professional regarding setting up a trading company or offshore based company to reduce my tax burden or the maximum profit limits as an individual before Tax is due.

The amount of profit is getting substantial & I want to make sure I keep some back for tax if needed.

I believe you only pay Capital Gains Tax once you cash-in your tokens/coins for Sterling but I have more questions on this.

Cheers to all,


#2

Hello mate,

I am going to move this to a new category, but I understand you tried finding the best place to post.

I am sure answers wil follow


#3

Looked into this recently: UK Tax with Bitcoin

The website linked therein is pretty good. Essentially, go into fiat up to that amount either side of the end of the tax year and you’re good. The UK as it stands is pretty decent for tax on crypto gains.

I’ll quote it here too:

'It’s taxable as capital gains as soon as you ‘dispose of’ that share is my understanding which would include using that share to purchase a vacuum cleaner from a Currys Superstore with your TenX card.

You get up to £11300 tax free on capital gains. And then you pay 10% on anything over that but within your income tax bracket.

Example

Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £12,300. Your gains aren’t from residential property.

First, deduct the tax-free allowance from your taxable gain. For the 2017 to 2018 tax year the allowance is £11,300, which leaves £1,000 to pay tax on.

Add this to your taxable income. Because the combined amount of £21,000 is less than £33,500 (the basic rate band for the 2017 to 2018 tax year), you pay Capital Gains Tax at 10%.

This means you’ll pay £100 in Capital Gains Tax.

From https://www.gov.uk/capital-gains-tax5

Find anything further out, please share.


#4

Thanks, Gareth,

I appreciate your reply. I think I know where I stand but I’ll need to do some more checking as my annual income is above the basic rate.

I was wondering if I set up a Ltd company to trade cryptos then there may be other options & allowances. If/when we have a UK Bitcoin Pub meet-up it would be great if we could get a professional crypto accountant to offer some free advice in return for possible new clients.

I will put this to the organizer to see if it’s a possibility.

Cheers


#5

Yes, setting up a business has been a recommendation I’ve received too but haven’t looked into it.


#6

A number of legal questions arise in relation to virtual currencies, the first—and most
important of which—being whether they constitute a currency at all or have the status of legal tender. Another question is whether all virtual currencies should be treated in the same way—in other words, if the characteristics of one virtual currency are materially different from those of another, should they be accorded the same legal treatment (and, if not, what should be the factors that distinguish one from the other)?
From the economic perspective, money is identified by reference to the role it plays in
society—in particular, the extent to which it serves the following purposes:

References:
The economics of digital
currencies—Bank of England
Quarterly Bulletin 2014 Q3
• a store of value with which to transfer ‘purchasing power’ (the ability to buy goods
and services) from the present to some future date
• a medium of exchange with which to make payment; and
• a unit of account with which to measure the value of any particular item that is
for sale
The ECB does not regard virtual currencies as ‘full forms of money as defined in
economic literature’, stating that a ‘[v]irtual currency is also not money or currency from
a legal perspective’.


#7

UK tax treatment (income tax, CGT,corporation tax)

In the UK, HMRC considers that ‘[c]ryptocurrencies have a unique identity and cannot
therefore be directly compared to any other form of investment activity or payment
mechanism’, and that the tax treatment of any transaction involving the use of
cryptocurrencies needs to be ‘looked at on a case-by-case basis taking into account the specific facts’, each case being ‘considered on the basis of its own individual facts and circumstances’.

References:
Revenue and Customs Brief
9 (2014): Bitcoin and other
cryptocurrencies

HMRC cites the example of a transaction that is so highly speculative it may not be taxable (the corollary of which, of course, is that none of the losses would be relievable), and refer specifically to gambling or betting wins (which are not taxable) and gambling losses (which are not available for offset against other taxable profits).
Transactions that are subject to (direct) tax (such as a sale or disposal made for Bitcoins) need to be analysed in the same way as any other transaction—broadly, by reference to the nature of the activities (to determine whether the receipt or expenditure is income or capital) and the status of the parties (to determine whether income tax, CGT or corporation tax is in point). HMRC states that ‘[f]or the tax treatment of virtual currencies, the general rules on foreign exchange and loan relationships apply’ and that they ‘have not at this stage identified
any need to consider bespoke rules’. Although these statements are made in the context of a discussion on corporation tax, it is generally understood to be statements of their general approach (and not restricted to corporation tax)


#8

The wording of these documents, litigation, policy is very loosely worded because they do not know how to regulate it, as their is no parliamentary act passing a specific law on it due to the nature that crpytos do not have a ‘real’ centralised body. It was never meant to be regulated or subject to penalisation, as this is an oxymoron in the point of cryptos, because it is being free from inflation, unfair distribution, paradoxical debt, etc. that makes it what it is

Instead, they use other laws and HMRC stipulations to try and manage the flow of money,. The point is, there is NO statute law in place over the taxation of crypto.

Open to interpretation.


#9

http://www.taxchambers.com/wp-content/uploads/2016/12/Taxation-of-Virtual-Currencies.pdf


#10

A clear guide here on UK Tax and crypto
https://cryptotax.uk/guide/


#11

Really useful! I’m still interested in putting the unrealised gains into a company.

Anyone done this or can point me a to a contact…like the title suggests?


#12

Great crypto accountant in the UK and Russia I found is www.cryptoaccountant.pro
I am sure they can help you out with taxes etc.

Martyn