Bitcoin and Tax

[camprasia]

Just looking for some general advice. I was owed money from a US based business, both personally, and through my business. I had a large account balance in USD with this business, and they used the USD I held with this company for general company expenditure, and the funds were, as they put it, "no longer available".

Law enforcement were sniffing around, so they tried to pay me back as best they could. They paid some of the money back in BTC in September last year, and I still hold the BTC.

When and what tax do I pay in the UK for the personal Bitcoin I hold?
When and what tax do I pay in the UK for the company BTC I hold?

I have not converted the Bitcoin to GBP, and I intend to hold it for many years.

And more out of personal curiosity, if I paid myself Bitcoin from the company, what tax do I pay personally for this if I keep it as BTC and not convert it to GBP?

Thanks!

 

[WaveJumper]

Check if you need to pay tax when you sell cryptoassets

Find out if you need to pay Capital Gains Tax when you sell or give away cryptoassets (like cryptocurrency or bitcoin).

www.gov.uk

 

[Paul Kelly ICHYB]

How did you enter the payments on to your personal and business accounts?

 

[Ozzy]

I think you may need to get some specialist advice here (from a good accountant) because like most ****** bubbles I would imagine the value of the BTC is less now than when it was given to you and it probably isn't worth the value of what you are owed. So you are probably still out of pocket, so you made a loss in total.

This would need to be clarified, and like most advice written by the Government, the gov link is a bit vague on the intricacies around reduced value and losses in assets - because it reduces your tax payable.

 

[Paul Kelly ICHYB]

Wouldn't it be treated as any another currency?

But yes, definitely one for an accountant!

 

[camprasia]

Here's some more meat on the bone...

I bought a website using my personal funds, and sold it for profit (normally this would fall under Capital Gains). The funds of which I stored in an online account with the Escrow company I used, and they never paid the funds from the sale to me. They eventually paid me 2 BTC (around $35,000) worth last year. This 2 BTC is now worth $76,000, just from holding it (so I'm up $41,000). I have yet to "cash it in". My regular accountant is not up to speed on ******, so thought I would get general advice, so I'm not going in blind, before paying for another accountant.

 

[Paul Kelly ICHYB]

Treat it as standard currency transaction?!?!?!?

 

[japancool]

Hold it for another couple of years, then there won't be any tax to pay on it at all.

 

[Bobbo]

Here's some more meat on the bone...

I bought a website using my personal funds, and sold it for profit (normally this would fall under Capital Gains). The funds of which I stored in an online account with the Escrow company I used, and they never paid the funds from the sale to me. They eventually paid me 2 BTC (around $35,000) worth last year. This 2 BTC is now worth $76,000, just from holding it (so I'm up $41,000). I have yet to "cash it in". My regular accountant is not up to speed on ******, so thought I would get general advice, so I'm not going in blind, before paying for another accountant.

More meat to the bone / adding a completely different dynamic to the story.

Did you report the capital gain on the sale of the website on the tax return for the year you sold it?

 

[camprasia]

More meat to the bone / adding a completely different dynamic to the story.

Did you report the capital gain on the sale of the website on the tax return for the year you sold it?

No I didn't report it, because they only made the BTC payment in September 2022, which forms part of the 22/23 tax year, which is due for reporting by the end of January.

 

[DWS]

No I didn't report it, because they only made the BTC payment in September 2022, which forms part of the 22/23 tax year, which is due for reporting by the end of January.

Not really my area, but would the gain not be reportable when the website was sold not when payment was received?

 

[Argentum Tax]

Not really my area, but would the gain not be reportable when the website was sold not when payment was received?

On the face of it, yes. The website would have been sold when ownership passed to the new owner.

 

[Kerwin]

Wouldn't it be treated as any another currency?

No. HMRC state that cryptocurrencies are assets and not currencies.

 

[WaveJumper]

Hold it for another couple of years, then there won't be any tax to pay on it at all.

Yep out of 15 ******'s on my screen this morning only one is showing "blue" Polkadot's up 1% (don't sound as sexy as Bitcoin) lets hope his transaction will be worth the effort in the long run ?

 

[mindworx]

BTC is classed as an asset, so tax will only be due if / when you sell it, if it's appreciated in price.

 

[WaveJumper]

Well the pundits are predicting 2024 is going to be a good year for the Crypt’s hence the pre Christmas rise in Coinbase shares, but as always we’ve heard it all before. It can be a wild ride up and an even wilder ride back down for the uninitiated