CRYPTO-CURRENCY TAX IN THE UNITED KINGDOM

davis196

hero member

Activity: 3178

Merit: 937

Quote from: GREEDYJOHN on September 20, 2019, 01:24:35 PM

This Question is for all members who understand Crypto-currency Tax in the United Kingdom:

What TAX do you pay when you withdraw your crypto-currency earnings in Pound Sterling (£), using your UK bank account?
- Is is Capital Gains Tax OR Income tax?

I'm not an expert in the UK legislation law,but capital gains tax is paid on savings that you've invested,while income tax is paid on the money(or crypto) that you have earned,while working online(freelance or something else).Do you see the difference?I guess that profits from long term crypto trading should be considered capital gains.I'm not sure though.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

Crypto currency is not considered as legal tender in UK so they consider crypto currency earnings as capital gain.

Source : https://complyadvantage.com/knowledgebase/crypto-regulations/cryptocurrency-regulations-uk-united-kingdom/

Exchanges from UK were regulated by HMRC so if you failed to pay the tax at the right time will add up with Stiff Penalties.

avikz

legendary

Activity: 3080

Merit: 1500

Quote from: GREEDYJOHN on September 20, 2019, 01:24:35 PM

This Question is for all members who understand Crypto-currency Tax in the United Kingdom:

What TAX do you pay when you withdraw your crypto-currency earnings in Pound Sterling (£), using your UK bank account?
- Is is Capital Gains Tax OR Income tax?

I would request you to please read the below link to know everything about UK crypto taxation,

https://www.gov.uk/government/publications/tax-on-cryptoassets/cryptoassets-for-individuals

It seems like capital gains as well as income tax - both applies based on the situation! If your crypto volume is significant, better get a professional help!

Theb

hero member

Activity: 1680

Merit: 655

@OP I think you have a misunderstanding on what taxes are. It's not about how you have withdrew your earnings from it but it is about how you have earned your cryptocurrencies. If you have earned it from trading cryptocurrencies or just hodling it in your crypto exchange/wallet then the earnings you will withdraw from it will be classified as capital gains because there are no other transactions related to buying and selling goods and services. But if they do came from buying and selling goods and services or any kind of business involved then your earnings would be subject to income tax.

Note:

Earnings from businesses or from buying and selling goods and services may not only be subject to income tax. If you don't convert it right away to Pound Sterling and decided it to hodl then the earning from it will also be subject to capital gains tax.

gentlemand

legendary

Activity: 2590

Merit: 3015

Welt Am Draht

Quote from: fiulpro on September 22, 2019, 09:55:28 AM

Why would it be income tax ?

Same as any other area. If you're a full time stock market trader that's your income so it's taxable as income. If you make a modest number of sales per year that's capital gains instead.

If you baked bread all day and you were paid in stocks that would be your income so they'd tax it accordingly. Income is income regardless of what form it's actually earned in.

fiulpro

hero member

Activity: 1890

Merit: 831

Why would it be income tax ?
This tax is very similar to stock market !! Thus I think it's most probably capital gains but at the same time the amount they are taxing is ridiculously high .
The tax put up by the government on the cryptocurrencies is way too high to be even considered!
I think you could just spread up your coins and then withdraw , your friends could use samourai wallet and then sell them online individually and then give it back to you ...
There are ways ..

gentlemand

legendary

Activity: 2590

Merit: 3015

Welt Am Draht

It depends on your definition of 'earnings'. A lot of people seem to refer to 'earnings' as any type profit at all.

If you've been sitting on your coins for a lengthy time and sell them realising a gain then that's going to be taxed as capital gains.

If you're a full time trader or are being paid regularly for work in crypto or mining brings in constant money then that's taxable as income.

This is one of the few threads anywhere that specialises in UK tax - https://old.reddit.com/r/BitcoinUK/comments/ba8d89/tax_thread_2/

befriendmywater

member

Activity: 658

Merit: 10

Quote from: GREEDYJOHN on September 20, 2019, 01:24:35 PM

This Question is for all members who understand Crypto-currency Tax in the United Kingdom:

What TAX do you pay when you withdraw your crypto-currency earnings in Pound Sterling (£), using your UK bank account?
- Is is Capital Gains Tax OR Income tax?

I think it's income tax, but don't let them know we're trading crypto. We can trade in some black markets for faster transactions and without any deal so that banks are aware that you are trading crypto.
That will avoid you having to pay income tax.

GREEDYJOHN

legendary

Activity: 1778

Merit: 1000

This Question is for all members who understand Crypto-currency Tax in the United Kingdom:

What TAX do you pay when you withdraw your crypto-currency earnings in Pound Sterling (£), using your UK bank account?
- Is is Capital Gains Tax OR Income tax?

Topic: CRYPTO-CURRENCY TAX IN THE UNITED KINGDOM (Read 204 times)