Crypto Taxes in the UK - Simple Guide for 2024 That Will Save You Money!
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- Опубліковано 30 січ 2024
- Crypto market in the UK is constantly growing and there have been important changes in the taxation of cryptocurrencies that affect every investor. In this video, we explain everything you need to know about the new regulations - simply and clearly. We look at all the most popular types of crypto trading and earning and give clear explanations for the tax rules with examples from real life.
In our video, we discuss in detail topics such as buying and selling cryptocurrencies, crypto-to-crypto trading, as well as specialized areas such as staking, mining, liquidity mining, lending, DeFi transactions and NFT taxes. Using practical examples, we show how all these activities are treated for tax purposes in the United Kingdom.
We have also put together a comprehensive crypto tax guide for you: cointracking.info/crypto-taxe...
If you are looking for a simple solution to calculate your crypto taxes, try CoinTracking for free: cointracking.info/?aa=550
🕒 Timestamps:
00:22 - General crypto tax rules in the UK
00:38 - Income tax vs capital gains tax for cryptocurrencies in the UK
01:34 - Crypto tax rates for the UK
01:50 - Investing vs trading activities for crypto in the UK
02:37 - Crypto to crypto transactions tax in the UK
03:02 - How much capital gains do I need to pay
03:09 - What is the tax free allowance in the UK
04:12 - Tax on crypto gifts in the UK
04:32 - Tax on buying things with crypto in the UK
04:51 - Income tax for crypto in the UK
05:28 - How to calculate your crypto income tax in the UK
06:03 - How to reduce crypto income tax in the UK
05:52 - Tax-free crypto events in the UK
07:26 - How to do your crypto taxes in the UK in 3 simple steps
08:09 - How to report crypto on your tax forms in the UK
08:27 - Recap of the most important information on the UK crypto taxes
Why use CoinTracking:
🔗 Simple Process: Discover the quickest way to import your transaction data, saving you time and effort.
💼 Financial Clarity: Gain a deeper understanding of your crypto tax obligations and ensure compliance.
🌐 Global Reach: Track your crypto portfolio and generate a reliable tax report wherever in the world you are.
🤖 Automation Magic: Learn how to leverage tax generation with CoinTracking, turning a potentially tedious task into a smooth, efficient process.
💰 Maximized Returns: Uncover potential deductions and optimizations to maximize your returns - because who doesn't love saving money?
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#cointracking #cryptotaxes #cryptotutorial - Наука та технологія
The cgt tax allowance for 2024-25 is only £3000!!!
Thank you for pointing that out. You're absolutely right, and we acknowledge the mistake in our video. For the tax year 2024-25, the capital gains tax (CGT) allowance in the UK is indeed only £3,000. We appreciate your vigilance and help in keeping our information accurate. We'll strive to ensure our future content is more precise. Thank you again for your feedback!
The first 2 comments are people correcting the video. No point watching it
They love the stealth taxes, lowering CGT threshold, keeping ISA limit the same, keeping tax thresholds the same…..but but they gave us a £50 saving in NI… mess of s country!!
@@Adam-mo2qw Thank you for your feedback. We apologize for the error regarding the CGT tax allowance. However, the video still provides valuable insights into crypto taxes, and we're confident it's worth watching. Appreciate your understanding! 🙏
Once again the Tories are squeezing those of us who are just trying to save. This government hates you it you aren't a millionaire.
I will be leaving the UK with all my wealth with me and never looking back
Agree and I wish I could do same
Please consult with your CPA before doing any actions, he will know the best for your individual case :)
The tax example at 5:21 is completely wrong!
• Earnings up to £12,570 are tax free.
• Earnings £12,571-£50,270 taxed at 20%.
• Earnings £50,271-£52,000 taxed at 40%.
So actual the tax owed in this example is £7540 (20% of £37,700 above £12,570) + £692 (40% of £1,730 above £50,270 threshold) = £8232!
Nowhere near £20k. Very misleading! Please be more careful and accurate.
As a note which he included at 3:55, the tax free earnings were reduced from £12,300 to £6,000 in April 2023 and are due to be reduced again in April 2024 to £3,000
Thank you for your correction! We apologize for the error in our video. We appreciate your attention to detail and your help in keeping our information accurate. We will strive to be more careful and accurate in the future.
How are NFTs treated? Most of the crypto I've bought has ended up in the form of NFTs , is buying an NFT with Crypto a taxable event or selling an NFT? It's all very confusing when you add NFTs into the mix..
NFTs are treated similarly to cryptocurrencies. This means that gains from buying or selling NFTs are subject to capital gains tax. So, trading crypto for NFTs and vice versa is a taxable event. It's indeed a confusing subject, and for specific cases, consulting a tax advisor is advisable.
You pay 40% only on amount ABOVE the £50k, not on all amount 05:45
Thanks for your feedback! You're right, there's a progressive tax rate. We simplified it in the video for clarity. Your insight is invaluable to us - thanks for helping us make our content more accurate!
@@CoinTracking so your figures on the tax paid are wrong, and yet your service is to calculate tax? The tax on £52k is more like £8,300. you are so far off its embarrassing
@@bennyw7337 Thanks for your feedback! You're right. As mentioned in previous comments that's a progressive tax rate. We simplified it in the video for clarity. Next time we'll make it right, promise!
If you accumulate multiple of the same tokens over several years at different prices and you later trade only a portion of your tokens at a profit, at which point of purchase would you measure your gains from?
The cost basis are calculated with the average cost of the purchase prices. But there are two more rules which apply (same day rule and 30 day rule) Find out more here: cointracking.info/crypto-taxes-uk/#:~:text=Cost%20Basis%20and,own%20is%20used.
Hi,
Say you bought the crypto when living in the uk and then decide move to a different country. Then decide to sell the crypto and withdraw the money to a bank account there. Does this mean i still have o pay the tax when or if i reurn to the UK?
We think it's highly probable, but please ask a certified CPA.
Question: If I buy 1k worth of Btc, then sell it into Xrp, then sell it into usdt , etc... However, I make zero gains on the swapping/selling. Doing this 50 times during the tax year, do I pass the yearly 50k proceeds to submit a tax return with my 1k?
Hey, yes, in this case you'd pass the limit.
When calculating gains I assume it works based on the price of the first crypto purchase you make versus the first crypto you sell rather than an average purchase price for your entire holding?
Most people buy and sell in small increments over time.
No, This is NOT how it is calculated. You have to know your ‘pool of actual cost’. Go and read the GOV.uk info.
Hey, thanks for your question! No, it doesn't work based on the FIFO method, rather the UK has its own method. It's the average cost method with some special rules. According to the government website, wallet addresses must be disclosed in case of an inquiry or review. www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto10400#:~:text=bank%20statements%20and%20wallet%20addresses%2C%20in%20case%20these%20are%20needed%20for%20an%20enquiry%20or%20review
How do I fill the form step by step. If you have any video video can you send me the link please. Thanks
We currently don't have a specific video detailing the step-by-step process as that would border on tax advice. I suggest checking the HMRC website for detailed instructions or consulting a professional tax advisor.
How would they know my gains if I only swap on a DEX?
Do you still have to report your crypto if your gains are under the CGT allowance and also is reporting your losses optional?
You can report losses yeah
Yes. From what I can find on websites, youtube and HMRC.
If you don't reach the threshold then you don't have it. I think of it as, we all get a few quid interest from the bank. But no normal person would file a self assessment unless you breach the Personal Savings Allowance (and even then I think.it would have to be a massive amount to be worth anyone's time)
@@ginger8383 so you don't have to file anything if your gains are under the Capital gains allowance?,
@bunny_93 I file (self assess) for work expenses because my employer doesn't pay 45p per mile when I travel. But I don't note any capital gains because I'm always below threshold. (Don't know what I'll do now that it's dropping to 3k for each partner)
@@bunny_93 Thanks for your question. Generally, you don't have to report gains that are below the Capital Gains Tax allowance. Reporting losses is optional, but it can be beneficial in some cases to offset against future gains. As @ginger8383 mentioned, it's similar to interest from the bank. If you stay under the allowance, usually no reporting is needed. However, to be 100% sure, I recommend consulting a tax advisor.
How do you explain to the tax man you bought coq
With a straight face. No laughing. 😉
Realised or unreealised? I mean if you invest 10k in 2023. Leave it for 2 years. Crypto is now worth 30k but you havent 'cashed' out? Do you pay tax on it?
No
no, when you just hold your cryptos, you don't have to pay taxes. When you decide to sell them, you have to pay taxes on your gains.
Unrealised gains aren’t profits and tax only applies when you sell for profit
How can IR consider a crypto to crypto trade as a capital gain, when no gain as actually been realised (converted to legal tender) at that moment the trade is made. If it's really the case one has to pay the IR TAX for a trade between ETH and USDT (for example) then that means that trading smarties for trump cards is a taxable event too. Or marbles for paintings. Or in fact any asset whatsoever. It's insane. Please can you clarify. Are the IR really asking UK citizens to pay TAX for on-chain activity before it's converted to actual UK legal tender ?
No doubt at all, I paid thousands of pounds in the last cycle just for trading btc and eth, no fiat related.
Trading smarties for paintings is a taxable event. If you got the smarties years ago when they would only be worth a pencil sketch on a fag packet, and their value has increased so you can exchange them for a monet, you have gained value, and when you liquidate the asset, by swapping it for a monet or fiat, you owe the tax man his share
Thanks for your comment. Indeed, the UK's HM Revenue and Customs (HMRC) considers crypto-to-crypto trading as a taxable event. This means taxes are due on gains from a trade, like ETH to BTC, regardless of whether it's converted to fiat or not. It's a complex area, and we recommend consulting a tax advisor for accurate information.
Thanks for the reply @@CoinTracking I find this unusual because HMRC have stated that Crypto Currency is not considered Legal. Therefor, no actual gain has even been realised. The gain is only realised when exchanged for FIAT (Legal tender). I put the legality of this into question. If this is indeed the case, then every single asset of any kind would need to have TAX paid on it before cashing out to Fiat. And what about kids playing crypto games onchain. Many will have assets that have appreciated.
@@user-jx5bb1xi6k Thanks for your question. Indeed, the UK's HM Revenue and Customs (HMRC) considers crypto-to-crypto trading as a taxable event. This means taxes are due on gains from a trade, like ETH to BTC, regardless of whether it's converted to fiat or not. It's a complex area, and we recommend consulting a tax advisor for accurate information.
It's sad - UK want's to hold full undefined control over something that should be decentralised... yet again monopoly wins - coinbase only source in UK :/
Last time I looked into this, airdrops were not taxable. Has this changed?
Hey, thanks for the question! We say all airdrops are taxable because we don’t know what you did to get them. If you'd like to set an airdrop as a non-taxable event, you can change the transaction type to 'airdrop (non taxable)'.
Here are the specific rules from the government for tax free airdrops: www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto21250
The tax free limit for capital gains for 2024 is £6k not £12.3k, next year its £3k I believe.
I switched off at this point, if the video can't even get this basic information right then I am not paying what he says with any credence.
You're correct, for the 2023/2024 tax year, the capital gains tax-free allowance is £6k and for 2024/2025 it's £3k. We apologize for the error in the video and greatly appreciate your attention to detail.
@@CoinTracking the video was great, just thought I'd help with a little bit of info I had.
@@Tommo1983ful If you continued watching the video, he mentions the current reduction in tax-free gains.
Do people need to disclose wallet addresses to HMRC? This is very private and safety critical data.
I don’t believe so
No, you don't have to share your wallet address. But it may help to disclose the address when the HMRC want to check if the trades you submitted, are correct. www.gov.uk/guidance/check-if-you-need-to-pay-tax-when-you-sell-cryptoassets#:~:text=You%20may%20also,a%20compliance%20check.
@@CoinTracking would be nice to understand if it is legally mandatory to disclose when asked. I would be happier to disclose in the future any earnings if I was asured that my wallet addresses would be safe. You never know where that information may end up. If someone discloses a £200k bank deposit and it gets leaked, it is bad, but with crypto the issue is that let's say criminals can monitor wallets and link them to people thught leaked data. And then someone may know that you have a £200k deposit on a wallet for which the keys you have under your control. So it is as easy as attacking your family until you hand over the 24 word password. No one will ever know. Getting £200k out of a bank may be more suspicious.
There is mass confusion over terms here. ‘Cryptocurrency’ is a meaningless word essentially as it covers so many very different ideas, from Bitcoin through to the most scammy fundraising projects such as ICP and NFTs
Put simply though, there is Bitcoin, then there are Altcoins; otherwise known as Shitcoins.
The whole idea of Bitcoin is to move outside of the Fiat Ponzi scheme that we find ourselves in.
If you understand this, then you will also understand how absurd the idea of tax upon Bitcoin is.
If you want to buy into a particular project, let’s take ethereum for example, it’s very likely that you will be selling once the price goes up. This takes place within the fiat money system and is therefore subject to the rules imposed by government, ie capital gains tax.
You do not buy Bitcoin to play that game. You buy Bitcoin to opt out of that game. You do not convert Bitcoin to Fiat; Bitcoin is designed to be held.
Soon enough, banks will lend against Bitcoin, similar to a mortgage, and soon enough, Bitcoin will be accepted as a form of wealth exchange.
There is absolutely zero reason to pay any tax on Bitcoin, please understand this.
So, I'm working in the UK, and I'm considering selling my Bitcoin at the end of the year for £2500. Would I need to pay taxes on that, or is it tax-free?
Hi, yes, you'd need to pay tax but a reduced rate due to the small amount of gain.
No its tax free up to 6k
Does anyone know an exchange where I can still buy in uk?
I think eToro should still work
If you’re a lower income tax bracket of 20% but make say 100k in crypto, will I pay 10% cgt until I hit 50k threshold and then pay 20% on the rest, or will it just be 20% for everything ?
Great question! Typically, for capital gains tax, the entire profit is considered. So, if your crypto gain is 100k, you'd usually pay 20% on the full amount. This is different from the progressive income tax. For accurate info, I recommend consulting a tax advisor or check the HMRC website. We have a list of crypto tax advisors in the UK on our website: cointracking.info/law/#cpa_map .
@@CoinTracking This advice is just wrong. In rough figures, if you earn £30k and make a capital gain of £70k (after allowances, so £76k overall for this current year) you will pay 10% on the first £20k (the difference between your earnings and the upper tax limit) and 20% on the rest. If you are married then you can utilise both the allowances for each of you AND, if you both earn
@@noelplum99 Thank you, for your important clarification. You're right in your points. Our aim was to simplify the explanation in our comment, but it's true that the details are a bit more complex. For capital gains below the higher income tax threshold of £50k, a lower tax rate of 10% applies initially before higher rates are applied. Individual circumstances, such as personal allowances and the income situation of spouses, play a significant role. For specific cases, it's always advisable to consult a qualified tax advisor. Thank you for contributing to a more precise explanation of our comment!
@@CoinTracking
No problem and thanks for the reply. Whilst you are here perhaps you could answer something I am not sure of?
I know I could transfer assets with my wife to take advantage of allowances and 10% rates for us both but how do you go about "gifting" your assets to your spouse, or rather proving it. We typically only have joint accounts for things anyway.
So would I need to set her up with a seperate exchange account, or wallets, and transfer assets across or what?
good question@@noelplum99
What about loans using crypto assets?
Tax free? use the DEX Thorchain to get a loan, sell the crypto you loaned, and I think that's tax free
Yes, receiving a loan is tax-free. However, when paying back a loan, capital gains could be triggered, when using for example another cryptocurrency. But there is no clear guidance from the government.
What about paying crypto loan with my British pounds salary?
@@shirinkherumuchiri1666 Unfortunately we don't understand your question. Can you elaborate please?
@@CoinTracking i was asking if i take crypto loan wimy assets as collateral and then i pay of the loan with my work salary which is British pounds and not pay with any crypto.
My question was is that a taxable event?
Is it Maximum £6000 tax free for this tax year or is that £6000 gained. So for example I buy bitcoin and put in £1200, and I'm now on £7800, so am i able to take out £7200, because I've gained £6000's
Yes, for the tax year 2023/2024, 6000 GBP capital gains are tax free. Here is an example from the UK government:
www.gov.uk/capital-gains-tax/rates#:~:text=basic%20tax%20rate.-,example,-Your%20taxable%20income
@@CoinTracking Thanks, and also what's the difference between paying 20% tax and 10% tax, does my job income play a part?
Ok say I make eg £120k profit initial’s investment was £15k
I track my portfolio/investment using coin-gecko n few other tracking apps.
Is that enough for crypto accountant to deal with someones taxes or do they need other information aswell? If so what other information/proof do they need ?
It depends on how many trades you have. If it's just one trade, then it's easy to deal with it without a tax software. But if you have a lot of trades, a tax software helps to track all trades.
@@CoinTrackingwhat is the best tax software to use for this?
@@reykeef CoinTracking. 😉
Your initial investment is not taxable as i understand it does this still count in a new tax year ?
Say i bought my crypto on 2020 and dispose of it in 2024 is my initial still not taxable
We can't give you any right answer. As we understood the law, every transaction from crypto to fiat is bound to be taxed - no matter the year. Please contact an official CPA to be sure.
Hey nocer content! Kennst du vielleicht crypto ico gruppen I'm dachraum? Lg :)
Leider kennen wir keine Krypto ICO Gruppen im Dach-Raum :)
Danke für das nette Feedback!
So complicated.
Yes, cryptocurrency taxation in the UK can indeed be quite complex. Sometimes it feels like trying to solve the Rubik's Cube while juggling on a unicycle! But in all seriousness, it's worth consulting with a tax advisor to make sure you're on the right track.