Topic: How would one put bitcoin sale down as "capital gains" for HMRC (Read 128 times)
Thanks for the replies.
November 13, 2018, 08:41:03 AM
There are two types of taxes which are levied on gains received from bitcoin.
First is Income tax; if the person is a trader and buying; selling bitcoin and gains profit due to this trading. Then this income is taxable as Income tax. When trading is done; trader sells / buys something ; it is called his stock. So bitcoin will be termed stocks with the trader.
Investing with the purpose of holding and selling it after some time with the intention to earn profits is called investment. Investment is always an asset. And earning profit by selling an asset will attract capital gains tax. if someone invests in the bitcoin and after a lapse of some time sells it and earns some profit it will be termed as capital gain and capital gains tax will be levied.
Different countries are having different laws on it. Because some time period is also considered to classify the gain as Income or Capital Gains tax.
At the time of purchase the funds may have been paid through some bank; then the statement may be provided to satisfy the authorities. Proof of purchase is must. We must have records in writing.
First is Income tax; if the person is a trader and buying; selling bitcoin and gains profit due to this trading. Then this income is taxable as Income tax. When trading is done; trader sells / buys something ; it is called his stock. So bitcoin will be termed stocks with the trader.
Investing with the purpose of holding and selling it after some time with the intention to earn profits is called investment. Investment is always an asset. And earning profit by selling an asset will attract capital gains tax. if someone invests in the bitcoin and after a lapse of some time sells it and earns some profit it will be termed as capital gain and capital gains tax will be levied.
Different countries are having different laws on it. Because some time period is also considered to classify the gain as Income or Capital Gains tax.
At the time of purchase the funds may have been paid through some bank; then the statement may be provided to satisfy the authorities. Proof of purchase is must. We must have records in writing.
November 13, 2018, 05:51:44 AM
As far as I understand the most important thing is having a clear record of when and where the bitcoin was first purchased, and of course for how much, or for how it was otherwise acquired. If you've not traded the bitcoin then it's a lot easier but once you've traded it you can be taxed both as capital gains or as income. As for how that distinction is made you'd need a good accountant. What I've heard so far is that anything which isn't a huge amount is relatively unquestioned and that HMRC are mostly grateful that people are even making declarations in the first place. I'd just file the declaration and keep a hold of as many records as possible in case there's any push back. As long as you've been honest yourself then you shouldn't have any issues.
November 12, 2018, 04:32:03 PM
How could i put bitcoins down with evidence as capital gains to HMRC when i've moved the bitcoins around over the years and don't have access to original account.
How would i do it so if ever questioned i could satisfy their questioning?
How would i do it so if ever questioned i could satisfy their questioning?
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