Hi guys. Here are some links to help with further research Main Article link - www.cointracker.io/blog/cryptocurrency-taxation-in-the-united-kingdom Financial trader rules - www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56800 Official HMRC - www.gov.uk/government/publications/tax-on-cryptoassets Crypto tax calculator - cryptotaxcalculator.io/uk/?gclid=CjwKCAjw1uiEBhBzEiwAO9B_Hfv3LJ8FhC0ohdx0HlzOjhEP9FAwRP79ZqYexhMPGMsSh_V9AwEB3RoCIzMQAvD_BwE
Great video, this has helped me out a lot. The vast majority of crypto related videos and information in general tends to always be for US citizens. Appreciate this, thank you.
If I decide to keep my value in Bitcoin/crypto, and pay directly with it... Does that count as taxable? And also, for example: £1M is stored in Bitcoin/crypto, and I convert £10,000 for general spending (still under the 12k allowance), do I still have to pay some kind of tax for that? I want to make sure i'm abiding to laws and not falling into financial holes that might bite me hard for being unaware. Cheers mate.
11:18 - not sure if you are right here. You said that all gains from staking are taxed on disposal. With staking, HMRC states that is a form of income, so you buy 10k of coin X, it generates 2k of coin X in 1 tax yer, this 2k of coins are now your income, and it is taxed as an income (based on the price at the time it dropped into your wallet), and not on disposal.
Great video, ive liked and subscribed 👍 the only thing that wasnt clear was do u need to report your staking returns every year even if you dont sell / dispose of ur crypto? Also, do u declare stkaing income if its less than £12,300 gain per year? Thanks and keep the videos coming , they are really helpful 👍👍
Yea did you get any luck with finding out those answers? I made nothing so far in crypto and playing with very little, so do I need to even declare and if I do, I've only just discovered about all this complications :( I don't buy/sell, just hold what little i have long term, but would also like to know if staking my pennies needs declaring too? Its seriously complicated rules!!!
It's going to be a real headache for me to work out 😂 I'm really bad when it comes to working out the numbers. Will have to find a financial advisor in the long run. Thanks a lot for the helpful video, Pete. Covered a lot of useful points!!
Decided to jump into using Binance today, though for some reason it allowed me deposit funds into the app... But not use those funds to buy crypto directly which was slightly odd. But then it also allowed me to make Limit purchases with said funds... Very confusing indeed! In any case, here's hoping I can venture in when the price is slightly lower and dabble into the world of Crypto just a bit :D
I don't get it. I understand if you owned 1 bitcoin at 1,000 and sold it at 20k that's 19,000 and thus you are taxed. But how does it work it out if you are constantly buying small amounts?
Thank you for this video. From what you are saying in regards to gifting to your spouse, you do not get taxed prior to gifting you get taxed on the sale of the crypto. Is this correct?
Tax is due on disposal which could be sale of the crypto. What i'm pointing out is that, if you know you will have a gain you can gift, transfer to a spouse to reduce the capital gains due.
hi there great video very informative. just wondered wht yur thoughts are on airdrops through crowdfunds for example the current Dot crowdloans. would they be subject to income tax and CGT?. thanks
This is will Save a Lot of People Who are into Crypto Currencies the shock of Finding out Too Late that they will be Heavily Taxed . Thank from me and Others as Well.
Thanks for creating this video. I've been wanting to get into Crypto for a few years, but blurred lines around HMRC always concerned me & I couldn't find information online that broke it down in a way I could understand. I'm gonna go back & watch some of your other vids!
Cool vid mate! quick question I started crypto early this year through covid, at first I didn’t know what I was doing and traded crypto for crypto not noting down all these transactions, I started with 3k now have just over 8k I want to start a clean slate and just HODL. with the bed and breakfast rule do I have to cash out to my fiat bank account and wait 30 days or can I exchange for usdt/usdc and wait for 30 days and start again? Hope that makes sense?
How do we fill and pay for taxes when exchanging tokens? I don’t even remember how many coins I exchanged in the past as well as what price. That’s crazy
Great video and happy to hear that the tax is only 10% and not 20% if you are a low tax payer. My question is if I have a UK bank account yet I am living abroad and am non UK resident for tax purposes, would I have to pay tax on the crypto? I would think not as I am non resident for tax purposes but clarification would be good. THKS
how fast do we have to show the profits to the HMRC after cashing out? Is there a time limit, like if i cash out big amount, will the hmrc be thesecond day at my door or how does it work? thanks
Hi, great video! One question. If I transfer to my personal wallet, does it counts as disposal? Once I'm out of the exchange (Coinbase or other), how can the HMRC track my earnings? Thanks!
You most likely need programatic access to the tens of thousands of transactions per year and then use a software with detailed price history information to calculate the final tax number. I doubt there's an easy way around this.
Is the £12,300 allowance a total for all investments combined, or a total per investment? For example, if you have capital gains of £10,000 in Ethereum, and £5,000 in Bitcoin would you have to pay capital gains on £2,700 as your total capital gain was £15,000? Or would you pay no capital gains as your total gain per investment was less than £12,300?
Question on mining, example I earn yearly 4000-5000 dollars yearly. Do you rough estimate on the crypto rate you are mining and tax accordingly? Does electricity loss compensate?
Does the crypto asset that you sell on the exchange, as an example if I bought 500 dollars of ADA then sell it at a profit of a 100 dollars to buy Ethereum, is that taxable?
@@tipohungary no. If u have 12300 or under. Doesn't need to be reported according to my accountant but its good to have paper work and everything sorted for it just in case they send u tax letter lol. Personally, I think it's all bs. If people r paying tax on their crypto gains. They dumb
Hello, I am completely new to crypto space. Could you please let me know how you keep track on all your transactions and keep track at which price you but coins. I'm planning to keep and not sell my crypto for a few years and I am not confident that I will remember at what price I bought what by then. I use binance for trading, if it matters
Hi, I will try to formulate properly my question as English is not my first language. If I'm working and have crypto, then I change/sell/commerce with my crypto, with my income from work I received more than £12500, should I have to pay taxes in capital gain? I mean, that £12500 before I start to pay taxes is between both income and capital gains or is separated? I hope is understanding
Question on reinvesting your profits into other crypto, let’s say you bought a crypto asset for £5000 and then sold it for £20000. Tax year 2020 to 2021 You make a profit of £15000, taking into account your CGT allowance of £12300 you then pay tax over the above which is £2700. If you then reinvest the £2700 back into the same crypto or even a different one and continued to hold it into the following tax year 2021 to 2022 would you still need to pay CGT in 2020 to 2021 tax year on the £2700 you have reinvested.
Great video. A few questions: If you are a hobbyist and earn less than £1000 then do you need to complete a complete a self assessment to declare no tax to be paid? If you are a hobbyist and self employed in another field do you still get £1000 tax free or do you have to declare everything?
Sorry Jaish, I can’t give you a concrete answer because I’m not actually sure. I think checking with HMRC or a tax specialist is your best course of action.
Thanks for bringing crypto tax to the front - it's something that as a specialist tax advisor I'm keen for people to realise it is a big issue. However, in your video you suggest that hobby miners are not subject to income tax on their rewards - this isn't the case - HMRC state in their manuals that if you don't operate a trade it's taxed as miscellaneous income. The other thing for trades is that the £1,000 allowance stops you from claiming business costs (ie electric and equipment). Staking income is also subject to income tax in the same way as miscellaneous income.
There might be so many investments out there but if profits must be considered which is actually the sole aim of every investment then I'll advice you go into stock because it has a higher profit rate than most investments out there
Stock trading is a very profitable trade but many people fail to understand that in any trade you must go by a certain rule for you to succeed, you must have a reliable strategy for you to make profit.
Alot of people these days are beginning to realize the profits of stock trading which honestly i feel it's amazing, like you said yet again it really profitable when the right strategy and indicator is in place
Just a quick question. If I transfer crypto from the crypto exchange to a hard wallet that I own, is this classed as a taxable event? Thanks for the video
I am a little loss when it comes to mining and tax. I have read that you have to report it when minining (Even if you don't put it in your wallet) and after when it goes to your wallets and gets converted to £. My question is when do you have to report it during mining it? every 30 days? daily basis?. I mean the value can change a lot within a matter of a few days., so i am a little lost there. I just mine as a hobby to help offset the costs of things.
My understanding is that you have report the fair market value of what you mine when you mine it. So if when you receive the asset if bitcoin was at 10k, that would be the fair market value. This will be used in the calculation of what GCT you owe when a disposal occurs.
With crypto mining, how are my thousands of pounds invested in specialist mining equipment treated for tax purposes? Can they be deducted against my mining revenue? Can my additional energy costs be treated as allowable expenses?
Although it's not surprising that CGT is being applied, clearly there are tricks to mitigate that, so very useful! One thing I notice with your videos though Pete, is that the volume of your voice is considerably below normal levels, so perhaps you can record it at a higher level so that we don't have to increase volume and then get blasted by the Ads when they come on, hehe! Cheers from Brum!
Good question, I can only speculate but if you gifting it only for your brother to sell who may not pay tax, that would be tax evasion. which is illegal.
Are there any government initiative investment organisations which one could transfer crypto profits into which would exempt one from paying the government tax?
I've bought £1000 in MKR coin on coinbase but then decided to move my purchase at a slight loss in to another coin wallet called ADA. How do I declare this to HMRC?
Example: Year 1 you buy Bitcoin for $10,000 it goes to $100,000 then you trade your Bitcoin for Doge and Doge loses 90% of it's value year 2. so you're back to $10,000 what the heck are you supposed to pay in tax?
Is the £12,300 capital gains allowance separate to the personal allowance you get for working. I only earn 20 grand a year so I don't start paying tax till over 12,300 which is fine. But do I also get another 12,300 tax relief on any profit made from crypto or other investments? No one seems to ever make this clear
So if i buy 10k worth of bitcoin, then week after is 80k, and i sell for BNB by example, then week afterwards BNB go down and i have 10k again. Do i need to pay tax from the profit wen i disposed btc to bnb? Because in the end i never cash out and lost all that money.
HMRC will challenge which is why you to keep a record of yourself to prove your side you had expenses which I don't know how that's gonna work. Basically HMRC doesn't care less if you lose your money that they won't help you with, BUT if they see you making more profit than capital gain they will just tax you.
Lets say you work a regular job making £20k, you get taxed on that and on the side you made £2k in crypto profit. So is that £12300 capital gains tax free allowance only for the crypto or does that include your job as well? because you already get taxed on the £20k not £22k including your crypto?? So does hmrc only look at crypto assets separately? and even so how do they know you made 2k or 50k unless you have to report to them as soon as you are in possession of any type of crypto? The main question is (lol) do you have to let hmrc know even if your profit is £10? £0 or just holding not trading?
@@NitrousXProductions He didn't reply. You have a tax free personal allowance limit of £12500 from your job, and separately £12300 tax free limit on crypto. They are separate. Maybe you can open a business and spend excess of limits and report them as expenses = not tax. Simple stuff they didn't teach me in school.
@@conversationofmoney I’m good Pete I’m much than I have been after being in hospital at the beginning of the year which is still not resolved however I guess it’s because of the times we’re in now. However it’s given me more time to found out the best way to become financially free I hope you’re health ok too.
Hi quick question if I have a different nationality but I'm living in the UK and I'm working here and I have settled status to which country I need to pay my taxes? I know it makes sense to pay them in the UK because I'm staying here. But I just want to be sure, thank you ! I hope he's not the stupid question.
Yes I think it’s correct. But that applies to capital gains if you have been short-term trading the rules might be a little different and possibly income tax rates would apply, this is the bit I’m trying to find out at least but if you’ve been holding for more than one year that’s definitely fine under £12,300
what if ive held a crypto for roughly 7 months,traded around with it for another 1 month or so,then held it for a further 4 months would this be classed at CGT?
Love the videos, thanks for the help! So am I right in thinking if I’ve invested, regardless of the amount, I’m not liable for tax until I sell, trade, dispose of the crypto?? I’ve got small amounts in various crypto hoping one day it’s worth something
I buy / find a rock. I lend that rock to a friend who uses it to mine / find more rocks (can be the same rock or different rocks). He gives my rock back and to say thank you, he gives me a few rocks that he mined / found. At this stage, these "earned" rocks have no real world value but the the tax authorities want "their share" of the gain, even though it hasnt been converted into a fiat currency. You have to pay this tax using fiat currency which you either have or be forced to sell the rocks to get. You pay tax on this gain (which the authorities will base on market value and you pay with fiat) but tomorrow, the value falls to zero. You have paid tax using fiat currency on rocks that are worth nothing. How does this make sense? Am I missing something? Are we being screwed?
Is the 12k capital gains allowance part of the 12k allowance from earnings or can i have 12k of my earnings and 12k of my capital gains meaning i can have 24 k tax free in total?
Thanks for this, very informative. I was wondering if you could cover specifically when you trade a crypto for another and do that multiple times in a month or 3 month period. Would we have to calculate at the end of each tax year and pay tax or pay tax immediately if over the 12.3k. Also the best way to keep track of it. Thanks again. 🤓✌🏻
Example: I have bought 10 BTC at 100£, then after a year 15 BTC at 130£ (tot. 230£) then I will sell 20 BTC at 5000£. I have to calculate an average price of the 20 BTC and then deducted from 5000£?
So if I put £10 into any crypto and it increases by £1, then transfer it to another crypto, that £1 profit is taxable? (Assuming my earnings are over 11/12k which they are not yet lol) This seems so obvious now I’m hearing it explained to me. Wether it’s a transfer or sell, if it’s gained me profit, it’s taxable, is that correct? Sorry to sound stupid.
Hi guys. Here are some links to help with further research
Main Article link - www.cointracker.io/blog/cryptocurrency-taxation-in-the-united-kingdom
Financial trader rules - www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56800
Official HMRC - www.gov.uk/government/publications/tax-on-cryptoassets
Crypto tax calculator - cryptotaxcalculator.io/uk/?gclid=CjwKCAjw1uiEBhBzEiwAO9B_Hfv3LJ8FhC0ohdx0HlzOjhEP9FAwRP79ZqYexhMPGMsSh_V9AwEB3RoCIzMQAvD_BwE
Yo - this video was a vibe. Thank you for putting out high quality info in such a clean consumable way. Excellent.
Glad it was helpful!
Great video, this has helped me out a lot. The vast majority of crypto related videos and information in general tends to always be for US citizens. Appreciate this, thank you.
Glad it was helpful!
Great informative video, clear mastered vocals, straight to the point in the key areas. Notion: pension related crypto. Is any information available?
Great video Pete🙌🏽
Thank you 🙌
If I decide to keep my value in Bitcoin/crypto, and pay directly with it... Does that count as taxable?
And also, for example: £1M is stored in Bitcoin/crypto, and I convert £10,000 for general spending (still under the 12k allowance), do I still have to pay some kind of tax for that?
I want to make sure i'm abiding to laws and not falling into financial holes that might bite me hard for being unaware.
Cheers mate.
Thank you for doing the research for this; much appreciated
Glad it was helpful!
11:18 - not sure if you are right here. You said that all gains from staking are taxed on disposal. With staking, HMRC states that is a form of income, so you buy 10k of coin X, it generates 2k of coin X in 1 tax yer, this 2k of coins are now your income, and it is taxed as an income (based on the price at the time it dropped into your wallet), and not on disposal.
Very informative and clearly explained on a very important specialised subject thank you.
Glad it was helpful!
Hi while the video didn't really tell me anything I didn't already know I did like your style so will subscribe and watch more of your work. 😁👍👏
Thanks for the sub!
Really clear. Thanks for making this video
Glad it was helpful!
Great video, ive liked and subscribed 👍 the only thing that wasnt clear was do u need to report your staking returns every year even if you dont sell / dispose of ur crypto? Also, do u declare stkaing income if its less than £12,300 gain per year? Thanks and keep the videos coming , they are really helpful 👍👍
Yea did you get any luck with finding out those answers? I made nothing so far in crypto and playing with very little, so do I need to even declare and if I do, I've only just discovered about all this complications :( I don't buy/sell, just hold what little i have long term, but would also like to know if staking my pennies needs declaring too? Its seriously complicated rules!!!
Really enjoyed the content. Thanks for your knowledge 👍🏻
Glad you enjoyed it! Thanks for watching
Would really like info on where to find instructions on how to use spouse’s CGT allowance to complete my self assessment.
It's going to be a real headache for me to work out 😂 I'm really bad when it comes to working out the numbers. Will have to find a financial advisor in the long run. Thanks a lot for the helpful video, Pete. Covered a lot of useful points!!
There’s a link in the comment I pinned to a crypto tax calculator.
@@conversationofmoney hi sorry I can't find it 😭
If you don't want the stress , keep it simple , don't stake!
Decided to jump into using Binance today, though for some reason it allowed me deposit funds into the app... But not use those funds to buy crypto directly which was slightly odd. But then it also allowed me to make Limit purchases with said funds... Very confusing indeed! In any case, here's hoping I can venture in when the price is slightly lower and dabble into the world of Crypto just a bit :D
Need to fully verify account to have limits taken off?
I don't get it. I understand if you owned 1 bitcoin at 1,000 and sold it at 20k that's 19,000 and thus you are taxed. But how does it work it out if you are constantly buying small amounts?
Great video,very very helpful
Thanks Dominic
This video was so needed, really helpful.
Glad it was helpful mate. Thank you
@@conversationofmoney can you withdraw to fiat 12,300 every year without paying tax?
Thank you for this video. From what you are saying in regards to gifting to your spouse, you do not get taxed prior to gifting you get taxed on the sale of the crypto. Is this correct?
Tax is due on disposal which could be sale of the crypto. What i'm pointing out is that, if you know you will have a gain you can gift, transfer to a spouse to reduce the capital gains due.
This is the most comprehensive video on crypto taxes I've seen! Great job!
Thanks Anya
Great Video, really well explained.
Glad it was helpful!
Really needed! Great video
Glad it was helpful!
hi there great video very informative. just wondered wht yur thoughts are on airdrops through crowdfunds for example the current Dot crowdloans. would they be subject to income tax and CGT?. thanks
All airdrops are subject to tax it doesn't matter where they come from unfortunately
This is will Save a Lot of People Who are into Crypto Currencies the shock of Finding out Too Late that they will be Heavily Taxed . Thank from me and Others as Well.
You are doing great job . Thank You ! :)
Thanks for creating this video. I've been wanting to get into Crypto for a few years, but blurred lines around HMRC always concerned me & I couldn't find information online that broke it down in a way I could understand. I'm gonna go back & watch some of your other vids!
Glad it was helpful!
Great video mate
Thanks 👍
Cool vid mate! quick question I started crypto early this year through covid, at first I didn’t know what I was doing and traded crypto for crypto not noting down all these transactions, I started with 3k now have just over 8k I want to start a clean slate and just HODL. with the bed and breakfast rule do I have to cash out to my fiat bank account and wait 30 days or can I exchange for usdt/usdc and wait for 30 days and start again?
Hope that makes sense?
Hi Pete any knowledge about the tax efficiency strategy of utilizing crypto loans ?
Unfortunately you can't use ISAs within crypto so the only allowance you have is your capital gains allowance
How do we fill and pay for taxes when exchanging tokens? I don’t even remember how many coins I exchanged in the past as well as what price. That’s crazy
you need to keep track of all your transactions. The platform you use will have a record of all you buys and sells, you can extrapolate from there
Great video and happy to hear that the tax is only 10% and not 20% if you are a low tax payer. My question is if I have a UK bank account yet I am living abroad and am non UK resident for tax purposes, would I have to pay tax on the crypto? I would think not as I am non resident for tax purposes but clarification would be good. THKS
if you're non resident no, there should be no tax
how fast do we have to show the profits to the HMRC after cashing out? Is there a time limit, like if i cash out big amount, will the hmrc be thesecond day at my door or how does it work? thanks
Hi , income Tax on the Flare airdrop ?? Thanks.
Hi, great video! One question. If I transfer to my personal wallet, does it counts as disposal?
Once I'm out of the exchange (Coinbase or other), how can the HMRC track my earnings?
Thanks!
It would count as a disposal and if you don't declare it the exchanges have an obligation to in form HMRC of wallet sizes
@@conversationofmoney Thanks!
Dear Peter, is day crypo trading (thousands of transactions a year) subject to income tax or capital gain tax in the UK?
Yes it is
@@conversationofmoney haha. Capital gain tax or income tax?
How does that work if you are a trader on for example Etoro doing 20 different crypto trades per hour. gains and losses.
You most likely need programatic access to the tens of thousands of transactions per year and then use a software with detailed price history information to calculate the final tax number. I doubt there's an easy way around this.
Was hoping you would post a vid about this, thank you.
No problem!
Regarding the gift to spouse, do you have to transfer that crypto in to their own wallet or do you just claim that it's a gift?
it has to be transferred to their name as far as I'm aware
Is the £12,300 allowance a total for all investments combined, or a total per investment? For example, if you have capital gains of £10,000 in Ethereum, and £5,000 in Bitcoin would you have to pay capital gains on £2,700 as your total capital gain was £15,000? Or would you pay no capital gains as your total gain per investment was less than £12,300?
CGT £ 12300 for all together, not for sperate investment
@@buddhipeiris5133 Thanks.
in the uk do they do long term holds, im confused with, if we will get taxed on income tax rates or capital gains rates when we sell our crypto ?
very helpful thank you.
Question on mining, example I earn yearly 4000-5000 dollars yearly. Do you rough estimate on the crypto rate you are mining and tax accordingly? Does electricity loss compensate?
you should be using the current market value of the crypto for tax purposes
@@conversationofmoney thank you.
Right I’m just starting to get into crypto I’m young so I’m I right by saying That in the uk your 12,300 gained is tax free then after that u pay tax?
👆👆
What is the link for the crypto accountants? Or crypto specialist? I need an accountant
Do I need to pay SDRT on crpytos?
what about ENS and UNI airdrops?
Does the crypto asset that you sell on the exchange, as an example if I bought 500 dollars of ADA then sell it at a profit of a 100 dollars to buy Ethereum, is that taxable?
Obviously. YES
12300 is annual allowance. So anything under that is not taxable
@@founderofself not taxable but do you still need to report/file it?
@@tipohungary no. If u have 12300 or under. Doesn't need to be reported according to my accountant but its good to have paper work and everything sorted for it just in case they send u tax letter lol.
Personally, I think it's all bs. If people r paying tax on their crypto gains. They dumb
Where is the tax professional link?
Hello, I am completely new to crypto space. Could you please let me know how you keep track on all your transactions and keep track at which price you but coins. I'm planning to keep and not sell my crypto for a few years and I am not confident that I will remember at what price I bought what by then. I use binance for trading, if it matters
Thank you for covering this, its perfect timing for me as i only started investing in crypto!
Glad it was helpful!
sorry for your loss (money)
Hi, I will try to formulate properly my question as English is not my first language. If I'm working and have crypto, then I change/sell/commerce with my crypto, with my income from work I received more than £12500, should I have to pay taxes in capital gain? I mean, that £12500 before I start to pay taxes is between both income and capital gains or is separated? I hope is understanding
So if I convert my bitcoin to gbp but don't withdraw the money to my bank is that still classed as disposable
👆👆
Question on reinvesting your profits into other crypto, let’s say you bought a crypto asset for £5000 and then sold it for £20000.
Tax year 2020 to 2021 You make a profit of £15000, taking into account your CGT allowance of £12300 you then pay tax over the above which is £2700.
If you then reinvest the £2700 back into the same crypto or even a different one and continued to hold it into the following tax year 2021 to 2022 would you still need to pay CGT in 2020 to 2021 tax year on the £2700 you have reinvested.
No according to the rules. You may not have to pay CGT on the full gain as long as you are pulling the money oout into a personal account.
@@conversationofmoney should that say if your “not” pulling money out into a personal account?
What if I earn rewards from LP tokens as more LP tokens ? Do I pay taxes on the only when I sell them ?
if you earned it, it will probably be subject to income tax
@@conversationofmoney and then when I sell those tokens I pay again CGT ?
May be a dumb question but surely we only get taxed on our gains when the money is withdrawn back to our bank accounts?
On disposal is the correct answer but that draws a lot of confusion
Great video. A few questions: If you are a hobbyist and earn less than £1000 then do you need to complete a complete a self assessment to declare no tax to be paid? If you are a hobbyist and self employed in another field do you still get £1000 tax free or do you have to declare everything?
Sorry Jaish, I can’t give you a concrete answer because I’m not actually sure. I think checking with HMRC or a tax specialist is your best course of action.
@@conversationofmoney thank you
@@jaishpuri7001 bro to avoid all this just use an offline wallet, online wallet sucks after happened to my cousin smh
Thanks for bringing crypto tax to the front - it's something that as a specialist tax advisor I'm keen for people to realise it is a big issue. However, in your video you suggest that hobby miners are not subject to income tax on their rewards - this isn't the case - HMRC state in their manuals that if you don't operate a trade it's taxed as miscellaneous income. The other thing for trades is that the £1,000 allowance stops you from claiming business costs (ie electric and equipment). Staking income is also subject to income tax in the same way as miscellaneous income.
The airdropping of crypto is a problem. I was trying to see if any of the exchanges provide a yearly report of what is in your exchange account.
What are the deadlines we need to be wary of to do a tax return if we made gains this tax year?
Tax year end. There are specific dates for self assessment returns, I cant recall them off by heart.
Pete how are you supposed to pay tax on a crypto to crypto transaction? Does HMRC have a dogecoin address?
Tax would be paid in cash not crypto. HMRC aren't take advanced yet
There might be so many investments out there but if profits must be considered which is actually the sole aim of every investment then I'll advice you go into stock because it has a higher profit rate than most investments out there
Stock trading is a very profitable trade but many people fail to understand that in any trade you must go by a certain rule for you to succeed, you must have a reliable strategy for you to make profit.
Alot of people these days are beginning to realize the profits of stock trading which honestly i feel it's amazing, like you said yet again it really profitable when the right strategy and indicator is in place
investment requires good experience and knowledge to carry out a good and successful trade, I have lost a lot trying to trade all by myself
A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control
Just a quick question. If I transfer crypto from the crypto exchange to a hard wallet that I own, is this classed as a taxable event? Thanks for the video
I'm pretty sure that wouldn't be classed as a disposal but worth checking
The only time anything is classed as a taxable even is when you withdraw your gains in cash
@@emmkillaa is cashing out to stable coin a taxable event
I am a little loss when it comes to mining and tax. I have read that you have to report it when minining (Even if you don't put it in your wallet) and after when it goes to your wallets and gets converted to £.
My question is when do you have to report it during mining it? every 30 days? daily basis?. I mean the value can change a lot within a matter of a few days., so i am a little lost there. I just mine as a hobby to help offset the costs of things.
My understanding is that you have report the fair market value of what you mine when you mine it. So if when you receive the asset if bitcoin was at 10k, that would be the fair market value. This will be used in the calculation of what GCT you owe when a disposal occurs.
With crypto mining, how are my thousands of pounds invested in specialist mining equipment treated for tax purposes? Can they be deducted against my mining revenue? Can my additional energy costs be treated as allowable expenses?
I have a video out next with an accountant. We cover a lot
Although it's not surprising that CGT is being applied, clearly there are tricks to mitigate that, so very useful!
One thing I notice with your videos though Pete, is that the volume of your voice is considerably below normal levels, so perhaps you can record it at a higher level so that we don't have to increase volume and then get blasted by the Ads when they come on, hehe! Cheers from Brum!
Thanks mate
Hi Pete is there software that helps calculate tax on crypto exchanges?
There's a link in the comment i pinned mate. Check it out. Hopefully it helps
@@conversationofmoney I can’t find your pinned comment
Bro please could answer this one question, If I gift my brother an nft and he sold it would I have to pay tax even tho I dont own it anymore?
Good question, I can only speculate but if you gifting it only for your brother to sell who may not pay tax, that would be tax evasion. which is illegal.
@@conversationofmoney No he will still pay the tax but I won't need to pay the tax correct?
What about trading daily crypto and taking profits. Can i do it through a company as I will be withdrawing 50-100k a year.
If you're set up as a company, yes, but you will still have tax to pay.
Are there any government initiative investment organisations which one could transfer crypto profits into which would exempt one from paying the government tax?
None that i know of
I've bought £1000 in MKR coin on coinbase but then decided to move my purchase at a slight loss in to another coin wallet called ADA. How do I declare this to HMRC?
Self assessment
@@conversationofmoney thanks so much for your reply! What if I don't declare this?
I thought I didn't need to declare it if it's only £1000 ?
Example: Year 1 you buy Bitcoin for $10,000 it goes to $100,000 then you trade your Bitcoin for Doge and Doge loses 90% of it's value year 2. so you're back to $10,000 what the heck are you supposed to pay in tax?
Fantastic content. As always. We salute you.
Is the £12,300 capital gains allowance separate to the personal allowance you get for working. I only earn 20 grand a year so I don't start paying tax till over 12,300 which is fine. But do I also get another 12,300 tax relief on any profit made from crypto or other investments? No one seems to ever make this clear
hi,does buying and making profit off crypto count as a part-time or full time job?
So if i buy 10k worth of bitcoin, then week after is 80k, and i sell for BNB by example, then week afterwards BNB go down and i have 10k again. Do i need to pay tax from the profit wen i disposed btc to bnb? Because in the end i never cash out and lost all that money.
HMRC will challenge which is why you to keep a record of yourself to prove your side you had expenses which I don't know how that's gonna work.
Basically HMRC doesn't care less if you lose your money that they won't help you with, BUT if they see you making more profit than capital gain they will just tax you.
I use etoro for trading, if I buy crypto through the etoro platform in the form of CFD then is the taxing method the same?
That would mean your trading the asset not owning it so no, technically but worth checking with a tax specialist
Can you make DCIP review?
Who are they?
Has anyone have an excell spreadsheet to track all this? Or something similar
Lets say you work a regular job making £20k, you get taxed on that and on the side you made £2k in crypto profit. So is that £12300 capital gains tax free allowance only for the crypto or does that include your job as well? because you already get taxed on the £20k not £22k including your crypto?? So does hmrc only look at crypto assets separately? and even so how do they know you made 2k or 50k unless you have to report to them as soon as you are in possession of any type of crypto? The main question is (lol) do you have to let hmrc know even if your profit is £10? £0 or just holding not trading?
That's what I would like to know its not very clear. As majority of everyone is still paid in Fiat from their main job.
@@NitrousXProductions He didn't reply. You have a tax free personal allowance limit of £12500 from your job, and separately £12300 tax free limit on crypto. They are separate. Maybe you can open a business and spend excess of limits and report them as expenses = not tax. Simple stuff they didn't teach me in school.
Great video the Crypto currency space is just too risky for me at the moment hope you’re safe and well pete
I'm good thanks Tom. How are you?
@@conversationofmoney I’m good Pete I’m much than I have been after being in hospital at the beginning of the year which is still not resolved however I guess it’s because of the times we’re in now. However it’s given me more time to found out the best way to become financially free I hope you’re health ok too.
Hi quick question if I have a different nationality but I'm living in the UK and I'm working here and I have settled status to which country I need to pay my taxes? I know it makes sense to pay them in the UK because I'm staying here. But I just want to be sure, thank you ! I hope he's not the stupid question.
It depends on tax treaties. there are specific rules that apply so worth check with HMRC
Really helpful thank you
Glad it helped
So just to clarify if I make under 12k I can just withdraw and do nothing? Many thanks!
Yes I think it’s correct. But that applies to capital gains if you have been short-term trading the rules might be a little different and possibly income tax rates would apply, this is the bit I’m trying to find out at least but if you’ve been holding for more than one year that’s definitely fine under £12,300
@@akoliytv appreciate the reply, many thanks!
This is what I’ve been wandering about as the comment been here a while do you know if this is correct yourself now ???
what if ive held a crypto for roughly 7 months,traded around with it for another 1 month or so,then held it for a further 4 months would this be classed at CGT?
Any capital gain in taxable outside of your CGT allowance
Awesome video Thanks. Do u pay income tax for staking alone ie u staking but u don’t dispose it
There's tax on staking because it regarded as income as far as i can tell
Great video thanks for the heads up 👍
Thanks
Love the videos, thanks for the help! So am I right in thinking if I’ve invested, regardless of the amount, I’m not liable for tax until I sell, trade, dispose of the crypto?? I’ve got small amounts in various crypto hoping one day it’s worth something
Yes, according to what i found it's all about the disposal event
conversationofmoney as a 17 year old, can I just withdraw like £10k into my bank account?
Excellent video thank you :-)
Glad you enjoyed it
So if i buy 100 pound worth of bitcoin and sell for 105 pounds do i only get taxed on the 5 pound i make
yes less your charges...its Capital gains Tax
I buy / find a rock.
I lend that rock to a friend who uses it to mine / find more rocks (can be the same rock or different rocks).
He gives my rock back and to say thank you, he gives me a few rocks that he mined / found.
At this stage, these "earned" rocks have no real world value but the the tax authorities want "their share" of the gain, even though it hasnt been converted into a fiat currency.
You have to pay this tax using fiat currency which you either have or be forced to sell the rocks to get.
You pay tax on this gain (which the authorities will base on market value and you pay with fiat) but tomorrow, the value falls to zero.
You have paid tax using fiat currency on rocks that are worth nothing. How does this make sense?
Am I missing something? Are we being screwed?
this is what im thinking too i dont know coz i earn my monthly income from nodes/staking. fuuuck
Great information, I can’t unhear Jay-Z voice though😄
What about those with a job already? And doing crypto as a side job??
subject to income tax
Is the 12k capital gains allowance part of the 12k allowance from earnings or can i have 12k of my earnings and 12k of my capital gains meaning i can have 24 k tax free in total?
No they are separate. You will have probably used your 12500 personal allowance for earning if you're working so disregard it if so
Is there an ISA Allowance within crypto?
NO
Thanks helpful.
Glad it was helpful!
Thanks for this, very informative. I was wondering if you could cover specifically when you trade a crypto for another and do that multiple times in a month or 3 month period. Would we have to calculate at the end of each tax year and pay tax or pay tax immediately if over the 12.3k. Also the best way to keep track of it. Thanks again. 🤓✌🏻
Until its cashed out they don't care, its purely how much £ you get out of it when you got it ext
Example: I have bought 10 BTC at 100£, then after a year 15 BTC at 130£ (tot. 230£) then I will sell 20 BTC at 5000£. I have to calculate an average price of the 20 BTC and then deducted from 5000£?
I would consult with HMRC if you're in the UK. The exact calculation I find to be unclear
So if I put £10 into any crypto and it increases by £1, then transfer it to another crypto, that £1 profit is taxable? (Assuming my earnings are over 11/12k which they are not yet lol)
This seems so obvious now I’m hearing it explained to me. Wether it’s a transfer or sell, if it’s gained me profit, it’s taxable, is that correct? Sorry to sound stupid.
if you are over your capital gain allowance then yes and if you are disposing of the coin
Very informative! Thank you!
Thanks Kofi