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Author Topic: UK tax in relation to bitcoin  (Read 17104 times)
franky1
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February 12, 2013, 03:21:18 AM
Last edit: February 13, 2013, 02:33:19 PM by franky1
 #1

EDIT: to highlight a point that may have been missed further down: you are though still liable to income tax, aswell as those in your family if you gift them the coins if an individual or corporation tax if a company

but to clarify the point on capital gains tax that has been asked many times on different threads. in the UK, bitcoins are free from capital gains tax, because they are an asset(personal possession) which is under the CGT threshold of £6000 each.

now the long answer to explain why

bitcoin is: a personal possession asset
remember an asset is a product that stores value. such as art, antiques, your car. Things that cant really be used or changed into anything else but its sole purpose. it is an end product.


what bitcoin is not:
bitcoins are not a commodity.
remember a commodity is a basic good/raw material used in commerce for the production of other goods or services.
do not get confused by the stupidly named method of making your asset being called mining, to think of them as anything like gold.
bitcoins are not a division of a percentage of ownership of a company (shares)
bitcoins are not a division of a percentage of ownership of a product a company holds (stocks)
bitcoins are not the purchase of government debt (bonds)

unless a single bitcoin (set of satoshi's) gains the value of £6000 EACH you don't have to worry about capital gains tax. you can own as many assets and sell as many assets but as long as the individual value does not exceed £6k each your safe from capital gains tax.
EG i can have a picasso, a Monet, and a Rembrandt (paintings) and sell them all to one buyer at the same time and they would not be classed as set. unless they formed a well known grouping OR gave them much more value sold together then the combined total of selling them individually.

bitcoins do not come in sets. as there is no finite amount of bitcoin units to say you have a complete 'set'. there is no general term for (EG 500BTC) groups that everyone is aware of or comfortable to use in daily conversations that gives a set group of bitcoins more value selling them as the group then the combined value of selling them individually.
so treat a bitcoin as a sole asset or a 'set' of satoshi's.

so unless 1BTC or 100,000,000sat 'set' became £6k each, you have got no worry's about capital gains tax. just worry about income tax if your an individual or corporation tax if a business.

speak with an accountant for a more deeper explanation of assets or read this
http://www.hmrc.gov.uk/cgt/possessions/basics.htm

hope this makes sense

edited parts to make it simple to understand to the lay man

please consult an accountant before taking ANYONES word as gospal

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February 12, 2013, 04:13:44 AM
 #2

so unless 1BTC or 100,000,000sat 'set' became £6k each, you have got no worry's about capital gains tax. just worry about income tax. and inheritance tax, gifts to spouses etc.

That would only be true if an individual sold only one "set" per year. Do not mix individual annual tax free allowance for capital tax with whatever fantasy you came up with. "Individual" here refers to a person, not to a piece of Bitcoin or a carrot.

Also it is not 6000£ it is 7000£

Hence, most of OP is BS. Sorry.




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February 12, 2013, 04:36:41 AM
Last edit: February 12, 2013, 04:56:38 AM by franky1
 #3


That would only be true if an individual sold only one "set" per year. Do not mix individual annual tax free allowance for capital tax with whatever fantasy you came up with. "Individual" here refers to a person, not to a piece of Bitcoin or a carrot.

Also it is not 6000£ it is 7000£

Hence, most of OP is BS. Sorry.
{facepalm}
lol read the HMRC link PPLLEEAASSEE

.. hang on ill save you the trouble
Quote
Sets of possessions
A 'set' is a number of personal possessions that complement one another and are worth more together than separately. Examples may include:
chessmen
books by the same author
matching vases
sets of china or porcelain

If you sell or dispose of personal possessions as a set, the £6,000 limit applies to the set as a whole.
If you sell parts of a set to the same person in separate sales, the £6,000 limit still applies to the set as a whole. You cannot apply the limit separately to each sale.
Example - selling a set
Mrs Jones has a set of six chairs worth £30,000.
She sells the chairs individually to an antique dealer for £5,000 each.
If the £6,000 limit were to be applied to each chair, the sales would be exempt from Capital Gains Tax.
But the chairs form a set, so the £6,000 limit applies as if she had disposed of the set as a single asset for £30,000. Mrs Jones must pay Capital Gains Tax on the gain.

no £7k in sight

and also individual tax allowance is a separate thing again.. which is £8105

double fail but thanks for reading

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February 12, 2013, 04:58:12 AM
Last edit: February 12, 2013, 09:36:32 AM by Vladimir
 #4

You cannot bring rules for capital gains for "wasting" "personal possessions" to bitcoins. Well.. you can but HMRC will disagree. Otherwise I would buy 1000 shares of GOOG for 100$ each (a few years ago) and start selling them in "sets" of 10 shares for 6000£ profit tax free. It would take only 3 month of daily sales to avoid capital gains tax on 6000000£ profit. Nice fantasy.

The only fail here is yours, unfortunately. Sorry for disappointing you.

However, here is another scheme. Start a limited company, loan it some of your bitcoins. Sell those bitcoins as a company, borrow some fiat from the company at some very low interest. There is no tax event for capital gains in this case. I am not quite sure HMRC would be very happy about this scheme either and not sure if this would be legal at all.




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February 12, 2013, 05:59:41 AM
 #5

{facepalm}
lol read the HMRC link PPLLEEAASSEE

.. hang on ill save you the trouble
Quote
Sets of possessions
A 'set' is a number of personal possessions that complement one another and are worth more together than separately.
Half a bitcoin is not worth any less than half the value of a whole one. A satoshi is worth exactly 100,000,000th of a bitcoin. A bitcoin is worth exactly as much as the sum of its parts. A bitcoin does not by any stretch of the imagination meet the definition of a "set of possessions".

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February 12, 2013, 09:47:08 AM
 #6

wow the amazement of some people.

1.a set is when many smaller pieces are combined to create a grouping
2.a set is when many pieces kept together hold more value then splitting them up dispersing them out

ok.. now some practicals.

1. get 100,000,000 satoshi's .. would you call them a bitcoin or 100,000,000 satoshis with no formal name
2. send out your 100,000,000 satoshi in groups of 20,000 or individually 1 satoshi each you a single person. and watch the transactions fee's stack up. now is it more valuable to the recipient to receive it as a full bitcoin and keeping them as a full bitcoin to reduce/avoid transaction fee's when moving to and throw... instead of broken up losing him some satoshis selling/trading them individually.?


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February 12, 2013, 10:03:36 AM
 #7

I think franky1 is essentially correct on this one. (And no I am not an accountant!!)

But HMRC still win, if you dont pay CGT you will pay income tax on it and for many people this is just as bad, so this is no biggy. (No big loophole, I mean.) 

The point about 'sets' is this. If I buy 6 antique photographs for £1100 each you cannot class it as 6 seperate purchases, you have to class it as a set and as such it will be over the £6k limit.

The OP's point is that there is no rationale  for any particular 'set' of Bitcoins, so they must be treated as individual units.

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February 12, 2013, 10:14:42 AM
 #8

1. get 100,000,000 satoshi's .. would you call them a bitcoin or 100,000,000 satoshis with no formal name
Luke-Jr would disagree. The units are totally arbitrary. There is nothing special about the number 100,000,000 that makes 100,000,000 satoshi anything more than just 100,000,000 satoshi. You might as well say that 12 ounces of gold are a "set" because you have a "whole" pound.

2. send out your 100,000,000 satoshi in groups of 20,000 or individually 1 satoshi each you a single person. and watch the transactions fee's stack up. now is it more valuable to the recipient to receive it as a full bitcoin and keeping them as a full bitcoin to reduce/avoid transaction fee's when moving to and throw... instead of broken up losing him some satoshis selling/trading them individually.?
Send out your 6 chairs individually. And watch the delivery fees stack up. Doesn't matter whether the chairs are part of a set or not. It doesn't make the chairs "more valuable" for the recipient to receive them in a single shipment, it just means he has to pay less fees. The market value of the chairs is exactly the same regardless of what fees he had to pay. And the same goes for bitcoins.

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February 12, 2013, 02:41:04 PM
Last edit: February 12, 2013, 03:34:17 PM by franky1
 #9

You cannot bring rules for capital gains for "wasting" "personal possessions" to bitcoins. Well.. you can but HMRC will disagree. Otherwise I would buy 1000 shares of GOOG for 100$ each (a few years ago) and start selling them in "sets" of 10 shares for 6000£ profit tax free. It would take only 3 month of daily sales to avoid capital gains tax on 6000000£ profit. Nice fantasy.

read my first post, ill refresh your memory:
bitcoins are not a division of a percentage of ownership of a company (shares)

now your refreshed. shares are not person possession assets. they are, as quoted on the HMRC page "Shares, unit trusts and other investments". which have their own category for how they should be treated when it comes to capital gains tax.

The only fail here is yours, unfortunately. Sorry for disappointing you.
i read the whole HMRC document and seeked guidance from accountants. but its obvious that selective reading has happened in your case.

However, here is another scheme. Start a limited company, loan it some of your bitcoins. Sell those bitcoins as a company, borrow some fiat from the company at some very low interest. There is no tax event for capital gains in this case. I am not quite sure HMRC would be very happy about this scheme either and not sure if this would be legal at all.
in your scenario. you talk about FIAT.. legal tender, yet again is NOT a personal asset.
what your scenario suggests is what banks do for loans. the closest scenario to yours that involves bitcoin is more like what pawn brokers do, buy jewellery cheap (giving the customer FIAT), knowing people pay by installments at a bigger fee to get it back.. and all that blah blah.
but the simple answer to that is that you AS A COMPANY would be paying corporation tax. (like income tax for non companies).

again you dont seem to know what category to put bitcoin into which is why you will be in the most trouble when it comes to paying your taxes.

treat bitcoin as a retail tradable product (asset) and not a company shares scheme. FIAT loans as they are a whole different kettle of fish and you will start to see the light of day of how to treat bitcoins.
if your a company, your like a pawn broker, antiques dealer, coin collector,etc,etc
if your an individual your just buying and selling valuable assets(antiques, merchandise, products) like selling your antiques you find in your attic on ebay.

by trying to say in one hand bitcoin is a company share, another hand bitcoin is FIAT and in a third hand its something else. just means you dont know exactly what it is.

and to the other poster. so 100,000,000 satoshi's are not a well known grouping also known as a bitcoin.. ?? come on everyone knows 100,000,000 is a bitcoin. and Luke JR has proven himself limited in his understanding of things. take his obsession with editing the litecoin with lies and false statements. its far better to go seek advice from an accountant or specialist then to take luke-jr's word as gospal

the term 'set' is about there being a known , name, group, set, collection of an amount of individual items together.
if i bought a 1 seater sofa for £1k a 3 seater sofa of the same make, model brand for £5k and that formed a known furniture set. (suite of furniture) then it becomes a set. even if the value of them combined is no different to selling separate, that are classed as a set.

if i bought a brown single seater sofa. and then bought a blue 3 seater sofa from totally different brands that d not form a known set. then its not a known set.

if i bought a 1960 Gold coin a 1962 silver coin and a 1963 bronze coin. totally different. but if in the collectors world they were known as the 3 rarest coins and if owning these three coins together you became the owner of pfft.. "the mint 3" (imaginary name) then thats a set.

i know its confusing about what a set is or isnt. but thats where a dictionary comes in handy and specialists too.

now until bitcoin gives a known title to .. pfft 500BTC for instance, and calls is pfft "MegaBlock" for instance, and people started selling them as megablocks everywhere. then it gets really fun trying to decide if thats a set or not.

but because a megablock is a made up name by me, its something we dont have to worry about. the important thing to learn from this lengthy topic of people poking at each others description is that until 1 BTC is worth £6k each you got no worrys about capital gains tax. the only worry is income tax if a individual or corporation tax if a company.

now instead of arguing with me on a forum. get down to your local accountant.
here endith the lesson

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February 12, 2013, 03:50:18 PM
Last edit: February 12, 2013, 04:36:16 PM by franky1
 #10

edit.

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February 16, 2013, 06:27:16 AM
 #11

treat bitcoin as a retail tradable product (asset)

Hi franky1 Smiley

I read the HMRC page and came to the conclusion that Bitcoin should not be considered an asset. Here's why:

(From the glossary page of HMRC):
Quote
asset
Assets are things you can own, such as:
shares, units in a unit trust and other investments
property - including land, buildings and leases
business assets, business premises, copyright and 'goodwill'  the reputation of a business)
antiques, jewellery and other personal possessions - known as chattels
See also goodwill and chattels
Quote
chattels
Chattel is a legal term for an asset that is tangible, you can touch and move it. Your personal possessions might be chattels.

(From the dictionary):
Quote
tangible
clear and definite; real

Whilst you and I both have a fair knowledge of what bitcoins should be, the legal precedent has not yet been set. Not only is it unclear whether Bitcoin is a chattel, it is also unclear whether it is considered an asset.

For example, if you walk into the bank to ask for a loan and they ask do you have any income or assets - would you respond "I have 10,000 bitcoins and a monthly income of 500 bitcoins" and expect them to approve a loan for 1 million pounds?

Or if you are scammed or hacked out of all your bitcoins, would you rely on the police to investigate your claim that your bitcoins have gone missing?

If bitcoins were clearly defined as an asset then these problems that exist today would not be so difficult. My opinion is that when the governments decide to define bitcoin as an asset, then they should be able to fairly collect CGT tax.

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February 18, 2013, 12:30:19 AM
 #12

Dadj, thanks for the points you have made. While I somewhat disagree with your arguments I do agree with your conclusion.

For example, if you walk into the bank to ask for a loan and they ask do you have any income or assets - would you respond "I have 10,000 bitcoins and a monthly income of 500 bitcoins" and expect them to approve a loan for 1 million pounds?

How about you telling them  "I have 10,000 kg of carrots and produce monthly  500 kg of carrots that I can sell on the open market". Would they give you a loan? This one can go both ways, I guess. There are plenty of people who would be happy to provide loans with Bitcoin used as a collateral.

Or if you are scammed or hacked out of all your bitcoins, would you rely on the police to investigate your claim that your bitcoins have gone missing?

Surely yes, I would expect them to take it as serious as if someone was conned out of lots of carrots.

If bitcoins were clearly defined as an asset then these problems that exist today would not be so difficult. My opinion is that when the governments decide to define bitcoin as an asset, then they should be able to fairly collect CGT tax.

This one is by far the most interesting point. Indeed there is no precedent defining bitcoins as an asset (is there?). There was actually a report previously that HMRC had an opinion that they do not care about bitcoins until those are converted into fiat. I would say that this point of yours is indeed very valid. If they wish to enjoy an opportunity to tax Bitcoin as an asset they should treat it as such.

In an ideal world they would classify it as money and treat it for tax and all other purposes as a foreign currency. This would be the best thing that could ever happen to Bitcoin, paradoxically. Meaning no VAT and no legal uncertainty and therefore less barriers for businesses of all sizes to start using Bitcoin. Who knows, maybe tax authorities will indeed be the first who legally define what Bitcoin is. They cannot have their cake and eat it.

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February 19, 2013, 02:33:22 PM
 #13

treat bitcoin as a retail tradable product (asset)

Hi franky1 Smiley

I read the HMRC page and came to the conclusion that Bitcoin should not be considered an asset. Here's why:

(From the glossary page of HMRC):
Quote
asset
Assets are things you can own, such as:
shares, units in a unit trust and other investments
property - including land, buildings and leases
business assets, business premises, copyright and 'goodwill'  the reputation of a business)
antiques, jewellery and other personal possessions - known as chattels
See also goodwill and chattels
Quote
chattels
Chattel is a legal term for an asset that is tangible, you can touch and move it. Your personal possessions might be chattels.

(From the dictionary):
Quote
tangible
clear and definite; real

Whilst you and I both have a fair knowledge of what bitcoins should be, the legal precedent has not yet been set. Not only is it unclear whether Bitcoin is a chattel, it is also unclear whether it is considered an asset.

For example, if you walk into the bank to ask for a loan and they ask do you have any income or assets - would you respond "I have 10,000 bitcoins and a monthly income of 500 bitcoins" and expect them to approve a loan for 1 million pounds?

Or if you are scammed or hacked out of all your bitcoins, would you rely on the police to investigate your claim that your bitcoins have gone missing?

If bitcoins were clearly defined as an asset then these problems that exist today would not be so difficult. My opinion is that when the governments decide to define bitcoin as an asset, then they should be able to fairly collect CGT tax.

How would you classify a programming code, software in the above list?

What about patented mathematical algorithm that has no tangible value, but the patent protecting it defines its commercial value?

Or digital goods that one cannot actually touch or move, but they are tangible and exist in reality, one can barter them for tangible goods or trade them for legal tender, can they be considered assets?

So many question, so little answers...

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February 21, 2013, 01:45:13 AM
Last edit: February 21, 2013, 01:55:31 AM by franky1
 #14

lol

thats where you are clinging at straws.

saying that assets might be chattels .. emphasis on might be and then using dictionary definitions of chattels to try and make it seem like all assets HAVE TO BE tangible.

the important thing is that assets are things that you own. the words "such as" are just examples, not a set in stone list. this is why i, in the first post defined that its not a share, its not a ....(well you read it.)

assets are property owned by you, objects, possessions and even intellectual property(graphic design, programming code, names, trademarks etc). HMRC, and solicitors will NEVER make it a finite list set in stone of what constitutes a personal possession.

so the question to leave you with is to define intellectual property, which in many cases is not tangible.

alot of people want to call bitcoin a commodity due to gold being a commodity, and that when asked the deeper question why is bitcoin like gold, their reply is "because you mine it." which is just a silly reason.

what if the mining program, due to use of computers and elliptic curves was called 'vectoring' much like art work/graphics design/games developers uses vectors. Art/graphic design material is not a commodity, but is an intellectual or tangible property.

J-lo (jenifer lopez's) buttocks are not stated on any tax related material as being an asset, nor on any legal documents about tax. yet they clearly are her assets. owned by her and have major value. hence why she has a million dollar insurance on them.

a surgeons hands are his assets. athletes/ sports peoples ligaments are assets. as i said before HMRC do not limit assets to just these items on the page. it is just used as an example.

and as for the scenario for a bank loan that dadj mentioned there are 2 things to note
1. if i walked into a bank and got asked what assets i had and i said i only have 2 metal coins in my pocket. at first the banks would think im crazy. but after explaining the coins are the rarest coins in existance and worth X amount, they would change their minds. so its all about explaining it. much like carrots Cheesy
and you would be surprised to find alot of corporate banks know what bitcoins are now. a few people in the UK have hinted to banks about digital currency and the banks themselves have said "your talking about bitcoin" and then the bank was ok with continuing with that days transaction.
2. if you had £200,000 worth or bitcoin in storage and earning £10k a month why would you take out a loan. ud be tied into a loan for 10 years where every single monthly bitcoin earning would go into loan repayments.. id put that money into a company EG buying T-shirts for £2 and selling them for £5 and reaping a 100% profit after costs. to net you £20k a month.


but getting back on topic. all assets have CGT possibilities. your car can be CGT'd so not paying capital gains tax on a cheap car is not avoidance. its just purely the fact that your car only cost £4k to not be liable for it. its not avoidance. its playing by the rules and knowing what your entitled to.


just remember to put any profits which you then spend on your lifestyle as income and pay tax on your income

and that's the end of my brain fart...

if you are still at all unsure, then go see an accountant. if you are 100% satisfied that i am on the right path, due to the discussions i have had with accounts then please still go see your accountant. never take anyone that you cant slap with a wet fish, advice at face value.

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February 25, 2013, 01:03:47 PM
 #15

...
and as for the scenario for a bank loan that dadj mentioned there are 2 things to note
1. if i walked into a bank and got asked what assets i had and i said i only have 2 metal coins in my pocket. at first the banks would think im crazy. but after explaining the coins are the rarest coins in existance and worth X amount, they would change their minds. so its all about explaining it. much like carrots Cheesy
and you would be surprised to find alot of corporate banks know what bitcoins are now. a few people in the UK have hinted to banks about digital currency and the banks themselves have said "your talking about bitcoin" and then the bank was ok with continuing with that days transaction.
2. if you had £200,000 worth or bitcoin in storage and earning £10k a month why would you take out a loan. ud be tied into a loan for 10 years where every single monthly bitcoin earning would go into loan repayments.. id put that money into a company EG buying T-shirts for £2 and selling them for £5 and reaping a 100% profit after costs. to net you £20k a month.
...

So, why do you think the banks do not accept Bitcoin?

It has a value, it is quite popular, like any software it can be defined as intellectual property so the accountants can take it into account (no pun intended), yet no Bank will touch it with a barge pole.

Why?

Let me give you a hint - it is the same reason Wall street institutions will not invest into and speculate with Bitcoin.
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April 12, 2013, 02:42:26 AM
 #16

Thanks franky1.

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camem
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April 13, 2013, 11:31:33 AM
Last edit: April 13, 2013, 11:53:10 AM by camem
 #17

I just called HMRC about this (13th April 2013), to at least tie down capital gains vs income tax

The first advisor had not heard of it but passed me to someone who had

The advice was very clear. For a UK taxpayer buying and selling bitcoins :

"buying and selling Bitcoins using your own money definitely comes under capital gains tax"
HMRC telephone advisor 13th April 2013

The advisor explained that it is treated like buying and selling a foreign currency.  

I asked if it would ever come under income tax and the answer was 'only if you were using other people's money to buy and sell, for instance running an investment scheme' - (not that pirate at 40 cares I imagine:-)

We didn't discuss mining income, or VAT for businesses.

Thought this might be useful for others. Of course I can't guarantee you'll get the same answer from a different advisor at a later date but this was at least a very clear statement of HMRCs current policy.
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April 21, 2013, 05:59:02 PM
 #18

bitcoin is: a personal possession asset

Where exactly is this stated?

Section/paragraph/line

http://www.hmrc.gov.uk/cgt/possessions/basics.htm

I'm guessing you're looking at -

Typical taxable possessions
Personal possessions that may be liable to Capital Gains Tax when you sell or dispose of them include:
jewellery
paintings
antiques
coins and stamps

These are examples of assets that you can physically touch and move, ie they're tangible and moveable, and special rules apply.
The special rules mean that you don't pay Capital Gains Tax on:


Your private car.

Personal possessions that are individually worth £6,000 or less at the time you sell or otherwise dispose of them. This covers many household articles such as fridges and sofas. But there are slightly different rules for assets that form part of a set - see the section on 'sets of possessions' below.

Most personal possessions that are 'wasting assets' - these are assets with a limited lifespan that often lose their value over time. See the section on 'wasting assets' below.


Might I point out the bit I highlighted.

Bitcoins do not fall under 'asset' description for Capital Gains Tax. If I am wrong and there is certain areas that indicate intangible assets then I'd be happy if you could show me please.

Also - you do not 'posses' bitcoins, they exist within the blockchain. What you (and I) have are keys that give us access to certain (ours) amount of bitcoin.

And a bitcoin contains 10000000 Satoshi's, it is not a 'whole' individual item. So until a Satoshi is worth £6000 (making a single btc worth 60 quadrillion (roughly, couldnt be arsed to count all the 0's) then bitcoin again does not fall under capital gains tax.

Capital Gains Tax: 0
Bitcoins: 1

But ye, if I'm wrong, please feel free to point me in the right direction (links).
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April 21, 2013, 06:05:30 PM
 #19

I just called HMRC about this (13th April 2013), to at least tie down capital gains vs income tax


"buying and selling Bitcoins using your own money definitely comes under capital gains tax"
HMRC telephone advisor 13th April 2013

The advisor explained that it is treated like buying and selling a foreign currency.  


Next time ask them to point you in the direction of the law and governance covering such this (seriously).

Also, how is it treated as buying/selling a foreign currency when it is not recognised as a currency.. Again, I think it should be treated this way. But until it says it in the law it is not .. no matter what me or anyone says on the telephone. Want points of law, links, show it.

Check my post above to see/understand for yourself how Capital Gains Tax simply doesn't cover it. Unless there's chunks of Capital Gains Tax law that I'm missing, and if I am, please point me in the direction, because HMRC can't seem to.

Think I'll be contacting HMRC myself over the next week or so to try to get more clarification..
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April 21, 2013, 09:04:01 PM
Last edit: April 21, 2013, 11:12:38 PM by stereotype
 #20

The discussion clearly shows the large grey space Bitcoin exists in, within the context of HMRC currently, what ever way you shake it.

Consider their stance for a minute. All of a sudden, they are getting inquires about this new-fangled crypto bit thingamajig somefingorother. They will make initial judgements based on their existing framework, and tables, flow diagrams etc. Without doubt, an invitation to produce whatever result you wish, depending on who you speak to. So what if you tried to escalate your inquiry to the decision makers? Are they going to commit to a defined process concerning the treatment of bitcoin for income/tax/CGT etc? And are they going to do that soon? Cant see it yet, personally.

So, is it not up to businesses that have bitcoin at the core of their trade, to decide how they declare bitcoin on their EOY accounts. Moreover, wouldnt it be logical for HMRC to sit back, wait to see how businesses declare bitcoin, monitor and number crunch its effect and consequence etc etc, and over time, take a defined stance?

Point being, its too soon to specifically define its tax route. How many returns in the last tax year shows a meaningful declaration of £BTC? Hardly any i would have thought?? So for now, its up to us/business to take their choice of the current recognized route i.e. if its 'money', its VAT exempt, but more costs associated with FSA issues, if its a commodity, it attracts VAT, and how income tax, can or cant be off-set, etc etc.
Basically, take your choice. Not ideal i know, but at least you are declaring something, and if and when HMRC want to argue your returns, they are then, setting the precedent.  

  
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