No, when you come to convert your bitcoins to GBP, they will be treated as vouchers so you pay VAT on them regardless of how they were earned.
http://www.coindesk.com/bitcoin-uk-hmrc-suggests-bitcoins-taxable-vouchers/
Topic: UK - Capital Gains, Tax and Gambling - page 2. (Read 4007 times)
I've been thinking out how to reduce any Capital Gains Tax that someone is liable to pay.
Lets say I bought 100 bitcoins for £1 they would now be worth £40K.
Assuming I'm already in a high income tax bracket, so the first £10K is part of my CGT allowance and the £30K is liable to tax at 28%.
But these taxes are only due when I realise my gains, ie. sell the coins.
So when I sell I would end up with £31.6K
So....
If I make a sequence of many bets with this capital, betting the whole amount through Satoshi dice or Just-dice.
(on just-dice this would probably be 1000 bets of 0.1 Bitcoins at 98% chance of winning)
I should end up with around 99 Bitcoins having lost around 1% due to the 'house edge' this would amount to £39.6K.
But winnings are not subject to Capital Gains Tax, and as all my Bitcoins are now the proceeds of gambling I don't need to pay?
http://www.hmrc.gov.uk/cgt/intro/when-to-pay.htm#1
I guess this situation hasn't occurred before because any gains in other instruments (stocks etc) need converting into fiat before they can be gambled, and of course that triggers a taxable event, in this case it never becomes taxable.
Thoughts?
Lets say I bought 100 bitcoins for £1 they would now be worth £40K.
Assuming I'm already in a high income tax bracket, so the first £10K is part of my CGT allowance and the £30K is liable to tax at 28%.
But these taxes are only due when I realise my gains, ie. sell the coins.
So when I sell I would end up with £31.6K
So....
If I make a sequence of many bets with this capital, betting the whole amount through Satoshi dice or Just-dice.
(on just-dice this would probably be 1000 bets of 0.1 Bitcoins at 98% chance of winning)
I should end up with around 99 Bitcoins having lost around 1% due to the 'house edge' this would amount to £39.6K.
But winnings are not subject to Capital Gains Tax, and as all my Bitcoins are now the proceeds of gambling I don't need to pay?
http://www.hmrc.gov.uk/cgt/intro/when-to-pay.htm#1
I guess this situation hasn't occurred before because any gains in other instruments (stocks etc) need converting into fiat before they can be gambled, and of course that triggers a taxable event, in this case it never becomes taxable.
Thoughts?
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