Hey hey, UK! UK Bitcoiners Might Have Tax Loophole

bitcoin
taxes
uk
regulation

#1


via Bitcoin.com


by C. Edward Kelso

With success comes attention, and with notice comes the taxman. Bitcoin’s crazy great jump in price over 2017 has taken the world’s most popular cryptocurrency from a curiosity into a begrudgingly valued asset by governments. Capital gains is the tool of most revenue collectors when it comes to crypto, including the United Kingdom (UK). What if investing in bitcoin was really just rank gambling? According to British tax law, that would mean such gains would go untaxed. It’s not as impossible as it might first read.

UK Bitcoiners’ Tax to Zero?

It was a rather mild effort as statements go. A spokesperson from Her Majesty’s Revenue and Customs (HMRC) commented: “We don’t normally tax betting and gambling because it is usually not classed as trading income,” he said. One could almost hear bitcoiners’ ears perking up all over England. “But there may be circumstances where factors such as the degree of skill and organisation would make the activity more likely to be taxable as trading income. Each case will depend on its own facts.”

Consumer affairs editor Katie Morley reported the statement as being a “tax loophole which reduces Bitcoin investors’ gains to zero” and could be “exploited by people filling in their returns for this tax year,” which might cost HMRC millions.

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Tax men around the globe are expecting coffers to fatten after 2017’s bitcoin gains, and much press has been given to their collection abilities or lack thereof. Studies have shown how few filings over recent years were due to nascent technology and lack of government minders’ understanding. Public comments by politicians hardly helped matters. But now the technology is taken seriously as a digital asset, and most see it clearly as a capital gain.

There is no denying bitcoin’s year. Thousands of percent price increases have brought tax collectors out in droves. In the United Kingdom, however, there appears to be a loophole some crypto enthusiasts might well claim: gambling. If money is made from gambling, a lark, it is not taxed. At one point in 2017, bitcoin’s price neared 20,000 USD.

Outdated Code, Triggers

Ms. Morley quotes a tax specialist as being agnostic on the question of whether bitcoiners necessarily qualify as gamblers. Perhaps investors who dabbled in relatively smaller amounts might able to claim the loophole. Otherwise, they’re subject to taxation anywhere from 18 percent to 28 percent.

Still another tax account believes claiming to be a gambler by investing in bitcoin would be a tough sell, but it might be easier to suggest gambling gains with altcoins, lesser-known “bets” as it were. “It is difficult to see how the profits on mainstream cryptocurrencies [such as Bitcoin] could be seen as gambling profits,” he warns. “There may conceivably be some cryptocurrencies in which the markets are random, and therefore the profits could be treated as gambling.”
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In recent months UK regulators have chirped about better formulating cryptocurrency regulations, no doubt driven by the asset class’ heady year. The last time the topic was formally legislated with regard to UK tax was back in 2014. With its publication, it was largely seen as a boon for the ecosystem, as it seemed the government saw bitcoin and crypto as less of a revenue enhancement mechanism than a new technology struggling to find its place.

Bitcoin remains an asset under UK tax law, and as such an allowance of the first £11,100 is not taxed. If gains do not amount to that number, bitcoiners are safe. And if it’s a case of individuals holding bitcoin appreciation beyond that amount, capital gains are only triggered at the time of profit taking, experts agree.


#2

posted yesterday: https://decentralized.tv/tax-loophole-found-for-uk-crypto-profits-youre-a-gambler-didnt-you-know/


#3

I’m taking tax advice right now.

@peter the problem is right now is that there is no case law.

I have letter from HMRC saying it’s up to me to interpret the 2014 ruling. Other UK web crypto tax sites favour US new rules, my accountant backs the new US rules to play on the safe side, as do Suppoman’s.

Apart from the UK having no case law, they can still go after you retrospectively.

In fact my accountant is insisting I take out annual investigation insurance.

So it’s a case of you’re welcome to interpret the UK HMRC ruling either way. But and he’s the big but. They can come after you for many years into the future until case law has been determined.

I’m playing safe and sleeping as soundly as my dog.

Cheers MX


#4

… Robert Langston of Saffery Champness has told cryptocurrency users to declare themselves as investors leaving them more likely to pay tax.

He said: “It is difficult to see how the profits on mainstream cryptocurrencies such as Bitcoin could be seen as gambling profits”.

“There may conceivably be some cryptocurrencies in which the markets are random, and therefore the profits could be treated as gambling.”

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Mr Langston has claimed that even if use is deemed gambling because investors are gaining an asset and not cash it remains taxable.
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#5

The other factors we have in UK to bear in mind.

We cannot generally buy guns
We can however do any bloody ICO we want to
We do have the best health & a good social welfare system, agreed the education system is fucked
It maybe that you can live the American Dream more in UK than the US (first wife from Chicago)

Flipping between a socialist libertarian and probably an anarchist, until the state has fallen I don’t actually have a problem paying my taxes.

My only real big bear is the Military Industrial Complex and US pharma privatisating OUR health system.


#6

Well if there are major loopholes with their immigration laws, there is more than likely loopholes in their taxation laws…I mean the Brits are not known for strict laws, just acting strict.


#7

Ah but we have something called the VAT man (value added tax).

Theoretically there is a long process but in the dystopia we live in…

HMRC threats of a Distraint Warrant

This kind of action can cause real disruption to the business as the ‘distraint order notice’, or ‘possession order’ can be used to seize assets and stock, but be aware that HMRC do not need a warrant if they choose to use their Crown Field Officers.


#8

I’ve worked in the NHS and I’m still surprised that so many in the UK think our health system is the best when clearly it lags behind many European countries. There’s two problems, lack of funding and bad management. The politicians can’t raise taxes because that loses elections, governments are notoriously bad at running things. I’m sure most of the problems in the NHS could be sorted out quite quickly, if competent people were in charge. I hope one day the majority in the UK realise that there are better options than we have now.