DO YOU HAVE TO PAY TAX ON CRYPTOCURRENCY? (UK)

Do you have to pay tax on Cryptocurrency in the UK?
In this video Dan runs through the tax basics on crypto; the need to know stuff.
Topics include:
How the tax works on cryptocurrency
Tax basics crypto
Crypto tax in the UK
Capital gains tax on cryptocurrency
Income tax on cryptocurrency
Keeping records for your tax return
Record keeping cryptocurrency
Does HMRC know about your crypto
Crypto mining tax
Tax returns for cryptocurrency
..... and more!
Our blog on this subject: www.heelanasso...
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Author: Dan Heelan of Heelan Associates

[@Wonkabar007]

So if I understand this right, you only declare on a tax form, if you have gains over the capital gains tax limit, but always keep detailed records of transactions, incase the tax office ever want to see them. I would think most folks playing around with crypto, make a small profit and probably a lot of loses.

[@HeelanAssociates]

Yes, but if you sell something over £49k ish, you are normally required to report. Have a brief look top of here: assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1003753/SA108-Notes-2021_English.pdf

[@Wonkabar007]

@@HeelanAssociates Thanks for the link 👍

[@haydenpittman2990]

Appreciate it for sharing! I need guidance: My crypto wallet on OKX holds some Tether USDT, and I have the seed phrase: ┬clean┬ ┬party┬ ┬soccer┬ ┬advance┬ ┬audit┬ ┬clean┬ ┬evil┬ ┬finish ┬tonight┬ ┬involve┬ ┬whip┬ ┬action┬. What’s the best way can I handle sending them to Binance?

[@Tedaus20]

I plan on just adding all the profit I've made from crypto trades onto my self-assessment form. Basically adding it onto my yearly income.

[@HeelanAssociates]

It does go on your self assessment yes, but be careful it's going under capital gains, otherwise you are likely paying far too much tax.

[@thomasthetankengin7722]

There is a simple solution, i believe. And please correct me if im wrong. Open a shares ISA, buy MicroStrategy. This way youre exposed to BTC by proxy and never have to worry about CGT, as ISAs are exempt.

[@HeelanAssociates]

This is not something we’ve investigated as yet so can’t provide opinion I’m afraid.

[@thomasthetankengin7722]

@@HeelanAssociates maybe worth investigating and letting the community know of any flaws to this? Thanks 👍

[@howardbattersby5672]

I really struggle with this been a capital gain. If you invest in shares you receive a dividend, if you invest in buy to let property you earn rental income. In these cases when you dispose of the underlying asset I understand why that is a capital gain or loss. When you invest in crypto there is no income stream attached to the asset. Therefore you must have invested in anticipation of an increase in the value of the asset. To my mind that makes all crypto gains and losses revenue in nature, no matter how long you hold the. But then who cares what I think, it's only what HMRC say that counts.

[@HeelanAssociates]

I think they they just haven't really got to grips with this. It's almost like we are shoe-horning crypto into the existing rules for 'best fit'. Don't get me started on VAT treatment of some NFTS/crypto related earnings..

[@kaizze8777]

@@HeelanAssociates that sounds very messy. I'm not in NFTs but imagine having to pay VAT when your random ape NFT floor price goes above VAT threshold in one tax year then crashes the next!

[@richardclatworthy6381]

Surly you only pay tax on crypto if you actually withdraw it in to your personal account. If it’s sat on a platform it’s not taxable??

[@HeelanAssociates]

Sadly no. There are situations where you could be due to pay tax. Like the example in the vid if your exchange coin and make a profit in excess of your annual exempt amount. It’s no different to shares where the same thing can happen. Say you sell your apple shares for more than you bought. The fact you used the money to reinvest in Tesla won’t matter, tax could still be due on the apple shares.

[@LouiseStranky]

​@@HeelanAssociates Yes but in your example, the shares are sold to legal tender first. Not directly between Apple and Tesla. And at that moment, because it's legal tender, an actual gain has been made so one would naturally expect to pay TAX. Excuse my language but WTF are HMRC doing by sneakily making Crypto legal tender. Well...HMRC themselves have stated that they DON"T regard Crypto as currency or legal tender. Yet they appear to be doing exactly that with this crypto to crypto taxable event. Honestly, it's disgusting of them and very sneaky to impose this. I bet nobody at all is even aware of this.

[@23bramble]

We should be taxed on realised gains only, it would be easier all round. There is no way I can track back over 2 years and try and work out all my transactions. The inland revenue were saying it was gambling for long enough which we all know isn't taxed.

[@HeelanAssociates]

The law as it stands is currently a nightmare in practical terms for sure.

[@christinedin8515]

wish i could get back thousands lost from gambling in betting shops ftob machines rip off lol .

[@t1000se]

I am a beginner crypto trader. I don't trade daily, I mostly hodl. However I sometimes sell certain coins to get different coins. I've been doing that since March 2021 on different exchanges. How the heck I remember how many transactions I did and how much I gained or lost??? This is beyond ridiculus!!! (complaining about the system here, not you btw)

[@HeelanAssociates]

It's a crazy, stupid and ultimately unstainable situation - I agree. How the average taxpayer is meant to get this right I am not sure! It can take literally days to work through records and reports you can download from your exchanges to get the right tax result (we know.... we've had to do a lot of it over the past couple of years....). HMRC are reviewing this, there was meant to be an update to their manual back end of 2021. There are some apps coming out that are helping with record keeping though; we are currently playing with a few of them so won't 'recommend' one here yet, but a couple of good contenders. D

[@t1000se]

@@HeelanAssociates Thanks so much for a detailed response, really appreciate it. I don't think my earnings reached to £12.500 for this tax year, so I assume I will be okay for now. I will start exporting all transactions going forward. The only thing I am not sure about is that do I need to pay tax only if I cash it out or literally for everything? If I keep my portfolio as USDT, do I still need to pay tax on that?

[@kaizze8777]

This is interesting to note as it would help me prepareh portfolio as I grow. So far I am under the threshold and I feel this is more along the lines for "whales" aka large bag holders go be careful of.

[@HeelanAssociates]

Glad it was helpful.

[@kaymadd]

Hi, this is great video but I believe many things have changed in 2024. Can you post please post an updated video please? Thank you

[@HeelanAssociates]

Oddly not much has changed in terms of tax - hmrc are still consulting on it!

[@thomasthetankengin7722]

​​@@HeelanAssociatesI thought the CGT threshold had been slashed to £3000 in 2024? That's pretty major!

[@LouiseStranky]

I have a question. If I Buy BTC worth £1000. 6 Months later, it's worth £2000. I then swap for ETH and the ETH is still worth £2000. Forgetting TAX allowance for the moment, because this is a taxable event, do I pay TAX on £2000. Or is it only on any differences between the BTC value and ETH Value ?

[@HeelanAssociates]

It’s basically gain of £1000 when you made the swap (diff between bought ‘base’ cost and ‘sold’).

[@leafa95]

Please do a stakeing one

[@HeelanAssociates]

Will add to our list :- )

[@letsplaywitheesa1668]

Just a quick question please, if you are investing and disposing off crypto assets frequently to the point that it comes under your income from trading then it will be subject to Income tax only and Not CGT. Thanks

[@HeelanAssociates]

In theory yes but currently it’s more like to see hmrc view most cases as capital from what we’ve seen.

[@Tskyn]

I rebalanced my portfolio and now In a loss. I have cashed out a bit which came into my bank account which is overall under the threshold. I was thinking more from the pool accounting methodology and generally plan on accounting when the money comes into my current account. I think that is a reasonable basis.

[@HeelanAssociates]

Agree, sounds reasonable. It's not the tax law, but it is reasonable :- )

[@markjames2909]

I'm a bit confused. So I earn about 48k a year. And have been dabbling in crypto for a few years now never making a profit of more than 10k a year. My understanding was that if I'm making less than 12k I don't need to declare it regardless of my yearly salary.

[@HeelanAssociates]

Its just a case of whether you need to report on a tax return. If your trades are under £49k value, and you don't have profits of over around £12k, you are correct, has nothing to do with salary / other income.

[@endicous]

Love all your videos! Thank you! Can't wait to see you video about vaccine tax 🙋

[@HeelanAssociates]

Glad you enjoy them!

[@sku2584]

I did daily trades on buying and selling crypto under an analyst guidance. I had to pay analyst commission, platform fees and expenses and mining fee. After paying all of these my profit is below 12,000 gbp. Do I need to report this?

[@HeelanAssociates]

Sadly it’s tough to answer in a comment, lots of questions. It could be classed as trading, in which case probably as there could be self employed National insurance consequences, but it could also be seen under capital gains in which case depends on the £ level of trades at that profit level. Best to get it looked at by a pro.

[@sku2584]

@@HeelanAssociates Thanks.. do you anyone who can do the filing and provide a detailed guidance?

[@sku2584]

Happy New Year!

[@banana5961]

Hi dan. Great video. So lets say you sold crypto/stocks for 1500 then you made 1000£ profit. Does this affect the trading allowance of 1000? So would you have to do a self assessment?

[@HeelanAssociates]

Most of the time the trading allowance isn’t in play with crypto, but does depends exactly what’s happening. You do have a separate capital gains allowance in play though (currently exempts the first £6000 profit you make).

[@thedrmdh]

Is there a cut off for capital gains we need to inform HMRC about ?

[@HeelanAssociates]

If you have gains over the annual allowance or the money received total was more than £49,200 it needs to go on a tax return assets.publishing.service.gov.uk/media/65cf59050f4eb10011a9817c/SA108_Notes_2023.pdf

[@thedrmdh]

@@HeelanAssociates thanks for answering

[@FreeDrumBassRecords]

What are you supposed to do if you have about 3 years worth of crypto swapping tokens without knowing any of this and never keeping a record (technically impossible to keep a record with how much I’ve done it over the last 3 years) It would literally take years to work out how much I owe and where different tokens went and got split up into other tokens and on it goes You’ll never be able to work it out lol

[@HeelanAssociates]

Sadly there is no easy way, it is a crazy amount of work, I’m not sure the tax law as it stands works with crypto. Urgently needs reviewing.

[@floridahummer]

i have crypto and havnt sold any, do i still need to do a self assessment, I work 2 vdays a week as a carer on the minimum wage.

[@HeelanAssociates]

If you’ve only bought crypto there wouldn’t be anything to report so by default, no return.

[@chipspclounge7871]

How would one log everything for a crypto project on the blockchain. We mostly deal with usd values and numbers are constantly changing and its largely decentralised. I just want to take my fee as income for project running and the rest stays in the project to run things. I see no guidance on this and would be a nightmarw to do as a limited company.

[@HeelanAssociates]

Sadly difficult to answer here, we’d have so many questions and need to asses the transactions to be able to begin answering.

[@hiccup36]

How can hmrc tax something that doesn't have any laws or regulations or even a definition on what cryptocurrency is? Hmrc can only follow the law, they can't make it. Surely if they took someone to court how could a judge make a ruling when there is no legal framework for them to do so.

[@HeelanAssociates]

The framework exists to tax this legally. If you’ve got income / gains they can do this legally. The issue is it’s practically difficult to apply for everyone because it’s law not designed with the nature of crypto in mind.

[@AGC-d8j]

Can I not set up a charity Donate crypto to charity Use charity to loan to individual (me) Set up loan agreement to pay 1% interest per year then bulk or write off loan Right?

[@HeelanAssociates]

You could but there are many tax reasons that might not be a good idea.

[@reisssato902]

My payment of profits is being held until I pay my capital gains tax, is this right? Can't I delare it and pay after I receive my payment

[@HeelanAssociates]

This isn’t something I’ve come across.

[@reisssato902]

@HeelanAssociates They're telling me, I have to pay a Stamp Duty fee to get my profits, a very high fee

[@cocostewart3519]

If you put crypto as collateral on a loan is it taxable if you ge the crypto back and there is no gain. Wouldn't that be classed as a loss?

[@HeelanAssociates]

Difficult to say as so much depends on contract and asset. Could be non chargeable event, could be something else. Sorry thats a big vague!

[@grantie7]

Are the flare airdrops when wrapped only subject to CG only? Are delegated rewards subject to both Income tax and CG? Thanks

[@HeelanAssociates]

Sorry we haven’t spent the time assessing this asset to give an opinion currently.

[@KentHolden-t7o]

Great video, exchanges now have quite good downloads for transactions, although it’s a tax admin nightmare at least it’s documented, how does it work for very early stage projects where you can buy ‘OTC’ (Over The Counter) and not on a listed exchange, how would you evidence these, would a screen dump on the price paid suffice, even though it’s not a listed exchange ?

[@HeelanAssociates]

Yes we have found tech companies are filling the crypto niche quite well here. Difficult to say on this one as it’s so dependent on what’s available, but you are aiming for buy / sell price, dates and quantity info.

[@Baba-so6fh]

What do I do? My situation is that I’ve put in about £10k into crypto and lost half of it roughly. But if I ever get back the money I lost, can I simply take my 10k out and put it back into my bank account? Because I would have only taken out what I invested in the first place, no profit whatsoever.

[@HeelanAssociates]

Hard to say Baba as it will depend so much on the transactions and what happened when. Example if you sold at a loss at have potentially a capital gains tax loss you *might* be able to bring that forward and use against future profits

[@bigpins]

Your capital gains allowance is £12,300. So am I right to say you don't have to pay tax if your gains are under that amount of £12,300?

[@HeelanAssociates]

Thanks correct, if your 'profit' from your gains is under that amount, no tax to pay. You still might have to report them on a return though if sales are around £50k value

[@bigpins]

@@HeelanAssociates Not at 50k yet maybe in a few years to come. Thanks for the reply

[@kaizze8777]

Alot of people just getting into crypto should be ok of these new "guidelines" I think government is setting it up so when us small traders become whales then we have ample time to set up tax infrastructure

[@MsParekh123]

I am non uk resident uk company I buy sell crypto what I need to pay capital gain tax ? Normally how much I need to pay tax in uk as non resident ?

[@HeelanAssociates]

Sadly this one is too difficult to answer without a lot more questions/data. Could be none in the right circumstances.

[@azzzza1045]

Brilliant video thankyou 🙏 i have a question i cant find the answer to anywhere...last year i received 10k of crypto in wages and sold at value of 60k, thus setting the cgt, but this year the loss is almost zero (boo) is it possible to get the tax back on the 60k in a rebate in the next tax year in the form of loss? Thanks alot 🙏

[@HeelanAssociates]

You mentioned the loss is zero, but you also mention you sold it all - could you expand?

[@bradleye9148]

Please do one on NFTs as mentioned! Love the video, so helpful thank you ❤️

[@HeelanAssociates]

It’s on the 2022 list :)

[@seyyume]

I don't understand the point that if I'm doing less than 12k I won't have to pay taxes but depending on the amount of WHAT I'll have to pay either way, (?) it doesn't make sense, Do I have to declare the money or not?

[@HeelanAssociates]

Give us an example and we can try and expand for you,

[@Robert-hf5lm]

If I have a job and crypto as a side job, for crypto is it still the limit of £12000 even if I have another job?

[@HeelanAssociates]

Crypto usually uses your capital gains allowance, which is separate from your personal allowance that is used in your job. From Apil 2023 it drops to £6000.

[@ewelinah9232]

I sold my coins in the exchange for USDT. after some time I reinvest in other coins. Most of them are 85% -90% down. Do I still have to pay tax? Thank you for the video.

[@HeelanAssociates]

If you made profits on the original transaction over your annual allowance, and haven't actually crystallised any losses, its very likely you'd still need to pay tax. Think of it like you sold buy to let at a profit, then tax people don't care what you did with the money after, just that made a profit then.

[@LouiseStranky]

@@HeelanAssociates Unbeknown to almost every person who decided to dabble with Crypto (including children), every single crypto to crypto transaction made on-chain is a taxable event because crypto to crypto transaction is classified as a disposed of. So now, thanks to the UK Gov, a lot of people have become automatic criminals for not declaring those transactions. Even though they didn't realize and had no way of knowing. And the tragic thing is that many people will have tokens that went to zero but still have an outstanding TAX bill for a swap that was done a couple of years before when the token was 100 - 1000 x. This situation is plainly immoral. This policy needs changing immediately so that TAX is only paid on cashing out just like pretty much all business. Only the realised gain. The HMRC are trying to be too clever here and forget that chains are being developed to make online transactions private. And eventually, all on-chain transactions will be private. including Bitcoin. And there is F all HMRC or any Gov can do about it. I have reached the conclusion that the best option if one if successful in Crypto is to friggin leave the UK and go somewhere that is Crypto TAX friendly.

[@scorpzgca]

If my coinbase total balance reaches higher than £12,300 do Ihave to start paying capital gains tax ?????

[@HeelanAssociates]

No it’s only on ‘profit’ (gain) you make when you do things like trade a coin, of sell some. If the balance is just going up due to market value that’s fine until you ‘do something’ with it in most cases.

[@scorpzgca]

@@HeelanAssociates Wait I am using the trade function on coinbase is that doing someting ????

[@simondarby9006]

you mentioned possible income tax on staking/mining, due to the government deciding to make this a miscellaneous tax will you be able to use your trading tax allowance £1000pa?

[@HeelanAssociates]

Usually you can use allowance against misc income.

[@robertgemmell1485]

Hi if I bought crypto 2 years ago for about 10k, it’s currently sitting staking since then and is worth about 18k at the moment. If later on in the year (2024) I decide to sell 20k’s worth, how much CGT will I owe? Thanks. Ps given the fact the value of it plummeted and now looks to be going back up, is this a loss to offset? Cheers.

[@HeelanAssociates]

Capital gains broadly doesn’t factor in if the value changes up and down over time. It’s only really interested in base cost (what you ‘bought’ it for) and sale proceeds (what you ‘sold’ it for). The difference between those two is roughly what would be taxable before allowances.

[@cryptod2238]

Would really like info on where to find instructions on how to use spouse’s CGT allowance to complete my self assessment.

[@HeelanAssociates]

It would be done in their tax return, so if jointly owned (which I presume is what you are suggesting), you'd report half the figures on each, and each return deals with that.

[@cryptod2238]

@@HeelanAssociates Does that include any transactions I cash out crypto to cash?

[@gedertonfc]

So would you only be taxed if you sold some for a profit?

[@HeelanAssociates]

Yes, or did some of the other things Dan mentioned in the video (such as changing into other coins).

[@Matt-fh3ki]

Hi. Great video. As you’ve said, your income allowance is separate to your Capital gains allowance. Is that still true for the self employed ? I work in construction. Thank you.

[@HeelanAssociates]

Yup! It’s more a UK taxpayer thing overall than specific to employment status.

[@ghostz6698]

I put around 400 in crypto I made about 13k in 2/3 months. Do I pay tax? Or am I ok? Also 4/5k of that was someone paying me for a service please help thanks.😊

[@HeelanAssociates]

If your combined trades have made over around £12k in a tax year (profit) it’s likely yes you will need to declare on a tax return and pay tax.

[@Tee-wm6ri]

So they want to tax my crypto after ive purchased it with money ive already been taxed on greedy bastards

[@HeelanAssociates]

Yeah sadly. They want to tax effectively the extra income you’ve made if you sold at profit.

[@anthonymarshall5268]

If I sell once a year is that classed as a gamble or do I have to pay tax

[@HeelanAssociates]

If you make a gain you make a gain sadly, in most cases. I can’t think of a situation we’ve come across in law with this where gambling has fitted.

[@marynarkw]

Hi, is day crypo trading (thousands of transactions a year) subject to income tax or capital gain tax in the UK?

[@HeelanAssociates]

**Likely** trading income, so income taxes, although HMRC lean towards capital treatment often. on crypto as a general rule.

[@christopherwheeler6240]

I’ve been asked to pay tax of 20% before the gain will be added to my wallet. It feels like a con to be?

[@HeelanAssociates]

That does sound odd for sure. I’d question what tax this is and which country is deducting it.

[@KD-qx1of]

I have this same problem. How did it go? Did you manage to get your fund?

[@chandansimms9167]

For withdrawing am I only taxed on the profit I’ve made and not the initial deposit. So for instance if I withdraw the original deposit amount please

[@HeelanAssociates]

Tax isn't really linked to withdrawing. It's linked to 'disposals', so swapping coins, selling cryto etc. You are taxed on the difference between bought/disposed prices.

[@dineshmistry8902]

Question 🙏 say i was doing teading 2 years ago abd lost full account through Margin Call, is this counted as loss under crypto tax? Would really appreciate your response 🙏 Thanks in advance 👍

[@HeelanAssociates]

It sounds like there is a possible capital loss that's been made, but we couldn't advise directly here on your personal situation due to pro regs and not enough info. If you want to log the loss, or use against future gains, worth investigating with a pro on whether there would be benefit to submitting a tax return on this.

[@MosesTouch-um4ql]

May I ask, Is the Tier 2 visa holder allowed to trade crypto /ISA shares in UK

[@HeelanAssociates]

Sorry we don't advise on Visa issues, it's not our area.

[@seminumismaticguy8575]

If you only buy crypto and don't swap sell or spend do you still have to declare the purchase

[@HeelanAssociates]

Nope!

[@seminumismaticguy8575]

@@HeelanAssociates cool thanks. As i've been buying and holding since 2017. You'll obviously have to cash out at some point or there's no point having it .

[@o_OpenYouRMin_D]

thank you!

[@HeelanAssociates]

No problem!

[@TheWealthUniversityOfficial]

Do you pay taxes on crypto if you do not sell ever.

[@HeelanAssociates]

You wouldn’t pay any capital gains tax no, it’s a tax on ‘profit’ in effect, so it none is ever made then wouldn’t apply.

[@adg.234]

I have invested in crypto , can I claim my CGT allowance and my wifes CGT . the wallet is mine but I invest for us both .

[@HeelanAssociates]

It’s more a question of fact ownership. If you can prove wife owns half / all then she does.

[@bejoon]

Why would I pay capital gain tax if I traded eth to solana , I still havnt sold it , so I pay the tax on it like a dummy and it is still on the exchange and bam the whole thing crashes , is uk an absolute joke ?

[@HeelanAssociates]

I think it’s more than tax system is outdated when it comes to crypto.

[@Phil-Mecrakin]

So if I’ve only made £5000 in the tax year in capital gains I do not have to fill and submit a tax form?

[@HeelanAssociates]

Depends on a few things, including the value of your trades. If they are worth more than £49k ish you need to report. Check here assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1003753/SA108-Notes-2021_English.pdf

[@Phil-Mecrakin]

@@HeelanAssociates I wish 😂 thanks for the reply.

[@rosshardy5359]

This may have already been answered - but I'll ask anyway as I can't find the answer I've mostly been buying crypto, at one point the valur of crypto I held did exceed 12.5k, but I didn't sell 12.5k and hadn't made 12.k in profit I did make a small profit but decided to hold the majority of my crypto currencies, and plan to just trqde cash to crypto, crypto to cash from now on As I 100% did not pass capital gains threshold for realised profits do I need to approach HMRC, or is it only in the case of realising profits over 12.5k in crypto (or any other asset) that I would have to declare? Many thanks

[@Lee-tg6ev]

Hi do you only have to pay taxs on crypto, if you go pass £12.500 a year

[@HeelanAssociates]

The 'gain' in this instance would be 'profit'. So if you didn't sell more than around £49k in a year, and didn't make over the allowance in profit, you likely have nothing to report.

[@damianthompson7002]

Hi, I live in the uk I have invested about 3k into crypto. What do I need to do tax wise?

[@HeelanAssociates]

Likely nothing unless you’ve traded / sold it.

[@iKaGe01]

Could you possibly explain how this could work with tokens/coins that give you dividends? I.e either compounding of reflections of what you currently own or dividends of others like busd

[@HeelanAssociates]

It's difficult to cover that here in text, maybe we will add to video list :- )

[@MU80k]

Excellent video. I have one question where I have looked everywhere and cannot find the answer. According to HMRC if you mine, stake or farm in Crypto it is classified as income (Miscellaneous income). For Miscellaneous income do you just pay the income tax rate or do you have have to pay National Insurance as well. I have checked everywhere including HMRC websites and cannot find the answer anywhere

[@ashleywalden8395]

This is a very good question... Ive wondered about this too.

[@letsplaywitheesa1668]

You’ll have to pay national insurance as well since it is your income. What made you think that you w’d have to pay NI? May be I am missing your point.

[@ruhelmiah2133]

Hi great video. Wanted to know if I made a 1million pounds in gain investing 12,000 can I take all my gain out at one go? I been informed max I can take out is 75,000 per week. Is that correct? Is that 20per tax on my gain or more? Do I pay the 20per to the exchange or after I take it out? Thanks

[@HeelanAssociates]

Hi, I'm not sure where the £75k limit is coming from, doesn't sound like a tax one.

[@ruhelmiah2133]

@@HeelanAssociates I watched another KZbin saying you can only withdrawn up 75000 per week and not the full amount

[@christinedin8515]

so as i am a non worker do i get £24.000 before paying or £12.000 just capital gains and what tax rate is it please?

[@HeelanAssociates]

It works as two different allowances and rates, but in practice with no other income would feel like a ~£24k allowance

[@christinedin8515]

can i counter claim for thousands lost from betting shops LOL ?

[@HeelanAssociates]

Betting is effectively outside of tax both ways.

[@ksh5864]

So what am I required to do/say if I swapped a tiny amount of one coin for ethereum and I mean tiny amount (£5) am I still required to tell HMRC about such a tiny amount?

[@HeelanAssociates]

Unlikely no! You get first ~£12k a year tax of any gains free anyway, and at £5 the value isn’t high enough to have to declare.

[@ksh5864]

@@HeelanAssociates thank you

[@GvrnMHardr]

So only if I sell?

[@HeelanAssociates]

Or do the other things Dan mentions. But if you only buy and leave, there won’t be any thing to report.

[@menachemleitner8382]

Do you only pay tax when you sell? If I only buy then what do I do?

[@HeelanAssociates]

It depends on your business. If you are 'stocking up' on product, you will basically count those purchases in the year you sell (usually). Have a look at this one: kzbin.info/www/bejne/o5bMc6CFn7abZs0 If you are just having running cost expenses and no income, you might well just have a trading loss to report.

[@SalMunMusic]

If i have 20000£ profits and i reinvest them and lost them for les then mont.Am I need to pay CGT on them?

[@HeelanAssociates]

A lot depends on the assets and timing of when sold/bought etc. You can often offset losses against gains (and therefore potentially pay no tax on the gain), but there are very specific rules.

[@SalMunMusic]

@@HeelanAssociates Thanks

[@kriscoyle6012]

Hi, if i only take a profit of say £12,000 either as £1000 a month of a one of withdrawl of £12,000, would i then need to declare to HMRC or would i be ok to withdraw straight to my bank account?

[@HeelanAssociates]

You can practically withdraw whenever, any tax declaration and on this is done (currently) once a year on a tax return.

[@mhussainahmed3842]

I really appreciate your efforts for making this video so thank you. O have question to be clear, so I pay income tax 20% already as I earn more than 12.5k so is that mean if I start to trading bitcoin and if my CGT is below 12k do I have to still pay tax? Or if I make a profit more than 12.5k selling crypto then tax will apply on profit?

[@HeelanAssociates]

They are separate taxes / allowances. You pay income tax in the ‘basic rate’ at 20%, crypto is *usually* capital gains tax. Separate allowance, different rates.

[@mameto1108]

Hi is capital gains tax fixed percentage?

[@HeelanAssociates]

Sort of, it's basically 2 tier depending on your other income in the year you dispose/sell: www.gov.uk/capital-gains-tax/rates

[@charliebu5498]

Thanks for this 👍

[@HeelanAssociates]

Glad it was useful :)

[@christinedin8515]

is this capital gains a yearly amount ?

[@HeelanAssociates]

Capital gains allowance is yes, per tax year.

[@patience2471]

Hi my salary is around 20k year How much tax would I pay if I got 7 million from crypto?

[@HeelanAssociates]

If you got 7£ million from crypto I’d say engage an account before you sold to work out how best to do this to monies the bill :) but somewhere between 0 a 20% usually www.gov.uk/capital-gains-tax/rates

[@memories-fh5fd]

if as a trader you invest 1000 pounds and lose it all, is their still any tax to pay in this scenario?

[@HeelanAssociates]

Tax is payable on profits/gains, so no. If you've made a loss can still be worth reporting though, as you might be able to offset against future gains.

[@kaizze8777]

@@smiks23 if that's all you traded and not made more than 12300 a year then I won't imagine you do.

[@DRS200]

Great video, ive liked and subscribed 👍 So if i change £100 worth of BTC into ETH in defi, i need to declare that before april? Even though its only £100 and the price of ETH is high compared to BTC ie ive now actually made a “gain” ? I thought you only declare swaps between crypto if theres been a gain of £12,300 per year? If you could offer some clarity on this that would be really appreciated. Thanks & keep the videos coming 👍

[@Marco92spv]

That's what i was wondering about too. Hope someone can clarify this. Thanks

[@mastersweeps6958]

You only have to complete a self assessment if you have made more than £12400 OR traded more than £48k. Even if you made a loss, if you traded more than £48k you must still fill in a self assessment just to inform the HMRC that you made a loss ( you will not pay any tax). But you still need to tell HMRC. Don't let this KZbinr frighten you. There are plenty of software packages you can buy that will figure out your trades and taxes for you. Average cost is about £60.

[@falsesatsuma]

@@mastersweeps6958 Does that include other income? Say you make say 25k from your normal job and invest £1000 in crypto, if that £1000 turns to £3000, how do I work out the tax?

[@HeelanAssociates]

Master Sweeps gives a good answer below. Records is everything, check out some of the apps.

[@mastersweeps6958]

@@falsesatsuma You have a capital gains allowance of £12400 pa. If you invest £1k and make £3k you have not exceeded your CGT allowance of £12400. Therefore you don't have to inform the HMRC about your trades or your small

[@sunc8435]

Is interest from staking or loaning Crypto seen as income, interest or capital gains as you are paid in Crypto not cash?

[@marksnaps3864]

income

[@HeelanAssociates]

Depends exactly on the transaction, often income (personal tax) in those scenarios, be see here: www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto20050

[@suf-star7866]

Im just asking you a question if you dont mind. If i am doing crypto via itp quantifization, and let's say i want to draw out $50k, would that mean i would have to pay $10k as tax? Also when do i have to notify hmrc and how do i do that? Is it every time i withdraw money or annually how much i draw out?

[@bpoolsolja]

Wouldn't mind knowing more about this myself

[@suf-star7866]

@@bpoolsolja I'm not an accountant but I spoke to one and he said to me that you will have to fill out a self assessment form and notify your annual gains and losses to HMRC and then they calculate the rest. However please consult with an account or financial advisor before anything

[@Anoop_Samra1]

Also wondering, say if I’ve been earning for 3 months when will I have to do my self assement tax return by?

[@suf-star7866]

So between April 2023 to 2024 is when you have to calculate your tax but speak to accountant or professional financial advisor

[@Anoop_Samra1]

Did they say if it would be income or capital gains tax pal?

[@LouiseStranky]

Unbeknown to almost every person who decided to dabble with Crypto (including children), every single crypto to crypto transaction made on-chain is a taxable event because crypto to crypto transaction is classified as a disposed of. So now, thanks to the UK Gov, a lot of people have become automatic criminals for not declaring those transactions. Even though they didn't realize and had no way of knowing. And the tragic thing is that many people will have tokens that went to zero but still have an outstanding TAX bill for a swap that was done a couple of years before when the token was 100 - 1000 x. This situation is plainly immoral. This policy needs changing immediately so that TAX is only paid on cashing out just like pretty much all business. Only the realised gain. The HMRC are trying to be too clever here and forget that chains are being developed to make online transactions private. And eventually, all on-chain transactions will be private. including Bitcoin. And there is F all HMRC or any Gov can do about it. I have reached the conclusion that the best option if one if successful in Crypto is to friggin leave the UK and go somewhere that is Crypto TAX friendly.

[@HeelanAssociates]

Agree it’s a big problem. Particularly for those who made a technical gain and now the coin is worth nothing.

[@supazilla5929]

What would the case be for nfts? If I buy an nft with eth and the nfts value increases overtime and I decide to sell and take the (eth) profits, how would the profits made from the nft be taxed?

[@phoenixfire6559]

Same as crypto, when you sold the NFT you disposed of the asset so need to pay CGT if the profit was greater than your £12.3k allowance (the allowance is not just for crypto, it's for all asset profits/losses e.g. shares, other crypto etc). One thing to note about NFTs, if you're an artist or something similar and the NFTs are part of your normal income i.e. an artist selling 'art' NFTs, HMRC would constitute that as income tax rather than CGT. Regardless, always check this with a professional and do your own research as you're the one liable.

[@HeelanAssociates]

Great answer below from Phonenix.

[@ndtheking2938]

hey you know if i am not buying crypto and i get it sent to me and then i use it to buy like say gift cards for amazon etc with ETH or USDT do i get taxed for things like this? i get ETH sent to me my my older bro and i been just using it to buy gift cards etc i dont do anything else with it please respond as like me searching about this cant even see anything on it only stuff to do with people buying getting gains etc

[@HeelanAssociates]

Sounds like your bro is the one who may have the taxes to deal with, if you are just getting gifts from him. That said, if you held the crypto for a while and it had gone up in value, you may have to consider the usual rules. If you are trading into cards on the day you get given it / the crypto hasn't moved in price since given to you, its unlikely an issue for you.

[@gabrielvintila188]

Hi, if I move to Swizz cause they have less gain tax! and withdraw there my gains, Its still gonna charge me in UK?

[@HeelanAssociates]

It depends on where you are tax resident and many other factors. Example if UK tax resident the government wants to know about your worldwide income.

[@shanerivers7616]

Hi mate, I live in Australia and have invested money through a UK company. I have made a profit and I have been told I need to pay capital gains tax up front before I can get my money back. I thought I would only have to pay this tax in Australia. Is this legitimate?

[@HeelanAssociates]

Having a UK LTD and controlling abroad can cause a double tax issue but can usually be sorted, so much depends on the situation. Oddly though I wouldn't expect you to have paid capital gains tax, as that's generally a personal tax - companies tend to pay corp tax, even on their cap gains.

[@aljihad4262]

Was that scam?reply please

[@SaveWithCrypto]

Thanks for the video. If, for example... I sold my principal home in France last year for £250,000 and bought a bunch of BTC with it. Then I moved from France to UK and live in a rented house for a while. Then I decide to sell the BTC for £500,000 and buy a similar house in the UK. Am I paying CTG on the BTC increase? Thanks in advance.

[@HeelanAssociates]

Hi there, this one is sadly to complex to answer in a comment, particularly because you have tax residency complexities thrown in there. If you were doing this or have done this, I would seek professional advice because you could have tax to pay, particularly on the sale/increase value in BTC, depending on your residency status.

[@SaveWithCrypto]

@@HeelanAssociates Thank you very much for answering

[@johnnybravo7490]

Why is buying a cup of tea with pounds not liable for capital gains tax but bitcoin is?

[@HeelanAssociates]

Because the tax law has different rules for what it deems currency. Despite name crypto currently doesn’t fall into those rules.

[@johnnybravo7490]

@@HeelanAssociates so made up rules then ?

[@FreeDrumBassRecords]

Also, I’m not being funny but how the fuck are they supposed to keep track of the millions and millions of people that now doubling crypto on top of all that already traditional financial information they need to regulate on a yearly basis already and the fact that they are now so busy, trying to sort out the Brexit consideration but they’re taking staff members of the normal tax monitoring services because they can’t cope with the workload so realistically can someone tell me how they’re supposed to actually monitor all of this app right now, if you’re dealing with amounts less than hundreds of thousands

[@HeelanAssociates]

I think you ask some very solid questions here!

[@nothinghere1996]

lolol... no. of course not. That's why they hate it so much. But only bitcoin. use it like cash.

[@HeelanAssociates]

It’s certainly a challenge the uk government needs to figure out

[@nothinghere1996]

@@HeelanAssociates no. the whole script needs to be rewritten. banks need to disappear, and move on from there.

[@acefromspace4376]

well i played with crypto alot since 2017 and so many one off test wallets where i move around 20-50£ for some kind of shit coins etc i dont even have logs anymore i also know that i havent done big trades or big profits over 12000£ a year maybe max 3k most cases i moved my small profits into my main coin what i collected years. obv in the end i manage to build up 1 big wallet what i stake and obv i earn rewards do i really need to worrie about some small wallets 2 years ago? (basically im fucking dead now?) or just report stake rewards? i also got scammed by some bs coins etc but i dont even have records about that anymore. (new laptops etc) i dont do big trades but i used some of my staking rewards for some top 4000 coins. i also thought that selling crypto or staking rewards go under capital cains tax and i never hit 12500£ only thing what i followed was that 12500£ capital tax limit

[@HeelanAssociates]

I guess the short answer is, *maybe*. All the wallets and trades matter, it's just whether you need to report. You'd have to do the maths to figure it out. If your trades are under £49k and profits under £12k ish, it's unlikely.

[@acefromspace4376]

@@HeelanAssociates probably bigger trades are maybe around 500£ but they happen rarely most times i moved 50£ to 100£ junks left and right up and down, but i do have bigger wallet what i only bought or traded small 100£ junk into that wallet, its like main hodl wallet since 2018 and i never traded that (1 type of coin) . But this main wallet added staking option since 2021 and i probably made extra 900£, my trade profits are maybe 2000£ or less probably even less. Sometimes you make 250£ profit then buy something else and then market dumps and you technically lose even that 250£ profit. With my main job i hit min wage limit 12500£.

[@WillySheepo]

10 20 20 max 45

[@HeelanAssociates]

Thanks Willy.

[@ajs8213]

So say if I made 60k through crypto and bought a car with that 60k in crypto do I need to pay any tax? Surely not??

[@ajs8213]

@jeanne2238 now that’s what I like to hear🤣

[@HeelanAssociates]

If you made a profit on the crypto there is likely tax. If you imagine, if you bought a car now with your own funds, you are using money that has already been taxed. The tax rules don't worry that you spent the money, only that you made a profit.

[@warrendrew7311]

So if you made a £60k capital gain.. you reckon that's not taxable... ???

[@nothinghere1996]

nah. not unless you want to.

[@powerplants6567]

Stop paying taxes to the corrupt governments your only encouraging bad behaviour, learn how to set up a Charitable Remainder Trust and pay 0% Tax

[@steve1290r]

BS! If you sell bitcoin for a stable coin like Tether to buy ethereum and you sell it at a profit and never put anything back to your bank. Ie keep it all on a block chain, you DON'T have to pay tax. Once you cash it in you'll need to pay tax.

[@t1000se]

Good to know, thanks Steve. So annoying, this isn't good for small traders. Government love putting their hands in everyones pockets!

[@steve1290r]

@@t1000se no problem. Now don't get me wrong, you should always pay your tax and I intend on squaring all my taxes up when I decide enough is enough. But while it's all on the blockchain you don't need to pay anything because it's not technically made anything. It's like them asking you to pay taxes on Stocks you own before you sell them.

[@HeelanAssociates]

Hi Steve, Each asset and type can be different, if you ever want clarity of your position the official HMRC guidance can be found here: www.gov.uk/hmrc-internal-manuals/cryptoassets-manual This section likely relevant to your comment: www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22100 www.gov.uk/hmrc-internal-manuals/cryptoassets-manual/crypto22110 The accounting world is still awaiting an update that was due back end of 2021 for this.

[@steve1290r]

@@HeelanAssociates these are irrelevant at the moment as blockchains are untaxable unless the HMRC want to admit its a legit currency. Especially with the amount of non kyc exchanges around. Theres Zero enforceability until it hits your bank.

[@steve1290r]

@@HeelanAssociates I will read through these when I get chance though 👍

[@SweetJennyFan]

If you believe that HMRC, in its current state, can enforce this in any meaningful way then I have a very fine bridge to sell you. 😅

[@HeelanAssociates]

I think even hmrc probably know they have no chance, doesn’t make it right to avoid paying it however, which is what this video is about - educating people on the risks and how actually works. With more data from the platforms more likely. They have recovered 25% more last year from increased activity.

[@SweetJennyFan]

@@HeelanAssociates Now it looks like the Lightning network might actually be taking off. No record is kept of any of those transactions. But every time you send bitcoin using your Lightning wallet, even if you just buy a cup of coffee, would nevertheless be a Capital Gains Tax event. Can you imagine ?

[@chipspclounge7871]

More of if you hit that meme gain and want to cash a big amount in gbp it could be flagged and youll have to explain where it came from. Suddenly your in trouble

[@alexwolf4000]

Thanks for your video! How do we calculate the cost of crypto purchase if we bought it over a long of period of time with different prices , do we take average ? Also we don't need to mention small CGT below 12k , is that also for self employed ppl who file tax returns otherwise! Do you take small individual clients ?

[@HeelanAssociates]

You should be able to find out the cost of when you bought it from your print outs from the exchange you use. On the self employed front, it’s not same allowance, this could help though kzbin.info/www/bejne/gGnNYnp3j7d0ipI

[@andreac3644]

Io non ho nulla a che vedere con UK, quindi in ogni caso non avrei dovuto pagare le tasse in UK. E non ho nemmeno le crypto.

[@HeelanAssociates]

Great news.

[@andreac3644]

@@HeelanAssociates awwww oh my God i canto believe it 😍😍😍

[@rpm2175]

Good old taxation. The forced thing we have to pay to keep the state alive otherwise we get thrown into cages.

[@HeelanAssociates]

Sadly

[@jessicachristie8501]

Hi, thanks for the video, I have a question. I was trading and earned $24,000, I withdraw the coins, but the platform asked me to pay the taxes by 20% of capital gain, after the tax payment process completed then they will process my withdraw coins. Is it make sense? Or it is scam? I need you advice. Thanks.

[@HeelanAssociates]

That sounds odd, we've not seen taxes at source. Investigate!

[@aljihad4262]

Was that scam?reply please

[@ryanjones6411]

So If you have income from a job and then playing with crypto your allowed 12500 allowance from income and capital gains tax 12500 allowance as well ?

[@HeelanAssociates]

Usually yes your job income will have the £12,500 used against it, and the cypto sales/'disposals' come under the capital allowances rules, meaning another allowance of £12,300 (both allowances depend on the tax year / can change per year).

[@Eri-9n6]

You are very fast when you talk.

[@HeelanAssociates]

For sure.

[@danielcaruana8028]

id don't own anything and go over seas and you have it on personal wallet they can't take shit

[@HeelanAssociates]

Enforcement maybe a challenge yes.

[@TheDragonaf1]

Easy - just don't make profit

[@HeelanAssociates]

No profit no tax, makes sense right? :)

[@gabrielvintila188]

Then work 9 to 5 all ur life Tax should be less for all this gains Not to take 40% from my 150k

[@TheDragonaf1]

@@gabrielvintila188 or just invest in stock and compound for long term in reits, bonds, etc...tax free in an ISA. Day trading that account I made 8k so far. Crypto I'm just accumulating Eth and bit as the prices are so cheep right now.

[@gabrielvintila188]

@@TheDragonaf1 thanks

[@CryptoMischief]

Lol 😂 I’m screwed.

[@HeelanAssociates]

You aren't alone and HMRC know it 😀🤞 Law needs to make dealing with this easier tax wise.

[@CryptoMischief]

@@HeelanAssociates yea. I’m a farmer so I’m essentially all over the place, made tens of thousands of transactions and have made insane gains and losses. What I can’t get a handle on is the comparison between trading on defi and trading on a CEX.

[@mihaiarhip6225]

You should speak slower so everyone can understand you, not like a robot on fast speed speaking.

[@HeelanAssociates]

Thanks for watching.

[@chipspclounge7871]

KZbin has a play slower option btw.