Question about capital gain.

[fgje79]

It might be a basic and stupid question. Just want to leave this crypto world.

If I sell A coin and get £10K capital gain. Also, if I sell B coin with £8K loss at the same time. Then, I have 2K capital gain to report in the same financial year? or I should report A profit and B loss separately?


Thanks

[1715249448]

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[DannyHamilton]

That depends on what jurisdiction you live in. Every government has their own rules about tax reporting.  Are you in London, England?

[fgje79]

Yes! Im in London.

[Don Pedro Dinero]

In general you should report separately the transaction on which you gained £10,000 and the other on which you lost £8,000. You will then have to pay for the £2,000 of capital gains. Although it can vary from country to country and there are places with minimum exemptions or reductions for holding assets for more than X amount of time, this is how it works.

[Helena Yu]

The summary is you don't have to report it separately, but if you wish to report it separately, you can.

For people who only have few coins or less transactions would be fine, but imagine with a trader who trade more than 100 coins, I'm not sure the box fillings is enough to report all the gains and loss.

No, HMRC doesn’t have a specific crypto tax in the UK. This is because HMRC sees cryptocurrency as exchange tokens rather than a form of money. But that doesn’t mean you don’t have to pay tax on crypto.

To accurately convey your crypto-related activities to HMRC, two primary forms must be completed: the HMRC Self-Assessment Tax Return SA100 form (including income derived from crypto activities) and the HMRC Self-Assessment Capital Gains Summary SA108 (detailing your crypto capital gains and/or losses).

SA100 form https://assets.publishing.service.gov.uk/media/642c0ac77de82b000c31355c/SA100_tax_return_English_2023.pdf

SA108 form https://assets.publishing.service.gov.uk/media/642ae09bddf8ad0013ac0c7e/SA108_2023.pdf

[hilariousetc]

It might be a basic and stupid question. Just want to leave this crypto world.

If I sell A coin and get £10K capital gain. Also, if I sell B coin with £8K loss at the same time. Then, I have 2K capital gain to report in the same financial year? or I should report A profit and B loss separately?


Thanks

You combine all your profits/losses into one amount so take away the losses from the gains. If you're in the UK then I don't think 2k capital gains would even need to be reported as it's under the tax free threshold, which is currently 6k but goes down to 3k next April, though perhaps you may have just been using the 2k amount as an example. As with all tax issues though it's best doing the research yourself or getting an accountant just to be sure.

[avikz]

It might be a basic and stupid question. Just want to leave this crypto world.

If I sell A coin and get £10K capital gain. Also, if I sell B coin with £8K loss at the same time. Then, I have 2K capital gain to report in the same financial year? or I should report A profit and B loss separately?


Thanks

It all depends on your local income tax law. In my country I would have to show these transactions separately. The tax will be calculated separately on both transactions. But that's a stupid law we have on cryptos. The general practice should be, the over all capital gain will be calculated based on these two transactions and the tax rate will be calculated based on your cumulative capital gain.

Just check with a tax lawyer in your country and you should get a clearer picture. By the way, why do you want to leave crypto market?

[pakhitheboss]

It might be a basic and stupid question. Just want to leave this crypto world.

If I sell A coin and get £10K capital gain. Also, if I sell B coin with £8K loss at the same time. Then, I have 2K capital gain to report in the same financial year? or I should report A profit and B loss separately?


Thanks

It all depends on your local income tax law. In my country I would have to show these transactions separately. The tax will be calculated separately on both transactions. But that's a stupid law we have on cryptos. The general practice should be, the over all capital gain will be calculated based on these two transactions and the tax rate will be calculated based on your cumulative capital gain.

Just check with a tax lawyer in your country and you should get a clearer picture. By the way, why do you want to leave crypto market?

LOL! In my country, the law is so stupid that sometimes I do not understand what stupid mind created the law. Only spot transactions are eligible for two kinds of tax, the first being tax deduction at source (which is for every trade that is being done), and the next is for capital gain. If you trade in futures you are not eligible for tax deducted at source and if you are cunning enough then you would not pay any capital gain tax.

Every country wants to get some benefits from cryptocurrency trading and the worst part is that those who are involved in creating tax structures are clueless. There are so many loopholes that can be used to save tax and in our country, everyone is smart enough to use those loopholes.

[zasad@]

It might be a basic and stupid question. Just want to leave this crypto world.

If I sell A coin and get £10K capital gain. Also, if I sell B coin with £8K loss at the same time. Then, I have 2K capital gain to report in the same financial year? or I should report A profit and B loss separately?


Thanks

This question concerns filling out the declaration.
If you want your losses to be taken into account by the tax authority, then, as a general rule, it is advisable to sell with a profit and sell with a loss in the same tax period (month, quarter,year, depending on your tax legislation). But it is better to consult a specialist.
The tax return is submitted to the tax office for the tax period, and you cannot have both a profit and a loss at the same time. You will end up with either a profit or a loss.

[virasog]

It might be a basic and stupid question. Just want to leave this crypto world.

If I sell A coin and get £10K capital gain. Also, if I sell B coin with £8K loss at the same time. Then, I have 2K capital gain to report in the same financial year? or I should report A profit and B loss separately?

I think you should consult your local tax consultant to tell you exactly what and how to declare this capital gain and a loss but no matter whether you show them separately or as a single unit, you will only be paying the tax of the leftover capital gain, that is 2K in this case.

Every country wants to get some benefits from cryptocurrency trading and the worst part is that those who are involved in creating tax structures are clueless. There are so many loopholes that can be used to save tax and in our country, everyone is smart enough to use those loopholes.

The loopholes exist because most countries haven't completely legalized cryptocurrencies and most of them will not accept crypto nor bans it but keep it in the grey area. This is a major reason why there are no clear rules and people find a way to bypass the crypto tax. Also at some points, the decentralization nature of the cryptocurrency makes it harder for the government to enforce everyone declare their crypto assets honestly.

[zasad@]

The loopholes exist because most countries haven't completely legalized cryptocurrencies and most of them will not accept crypto nor bans it but keep it in the grey area. This is a major reason why there are no clear rules and people find a way to bypass the crypto tax. Also at some points, the decentralization nature of the cryptocurrency makes it harder for the government to enforce everyone declare their crypto assets honestly.

In my country there are no laws that oblige citizens to pay taxes on cryptocurrencies, but there are laws that require citizens to pay taxes on income.
Those who do not want to pay taxes exchange cryptocurrencies for cash. But you have to be careful here and then do not spend this cash in banks, so that tax inspectors do not have unnecessary questions for citizens.

[YOSHIE]

Yes! Im in London.

Yes, London has legal provisions and regulations for crypto users and also for exchange companies operating there, especially regarding crypto asset taxes.

As important information for you, try looking at the information below.
Crypto Tax UK: Expert Guide 2024

How much tax do you pay on crypto in the UK?
For capital gains from crypto over the £12,300 tax-free allowance, you'll pay 10% or 20% tax. For additional income from crypto over the personal allowance, you'll pay between 20% to 45% in tax. The exact amount you'll pay will depend on the transaction you've made, the tax that applies, and the Income Tax band you fall into.

For the 2023-2024 financial year, the tax free allowance for capital gains has been cut to £6,000.

Looks like under £12,570 at 0%.


And for further information, try communicating and contacting: @Michelle Legge: Head of Crypto Tax Education.

Hopefully it can be petrified.

[zasad@]

It's not taxation, it's robbery. I am sure that serious investors invest millions of dollars and their income is much higher than £150000. Investors risk their assets, and in case of a successful investment they have to give 40-50% of their profits to the state.  This is not an adequate tax solution.