UK capital gains tax: when you sell a coin, which one are you selling?

Buffer Overflow

legendary

Activity: 1652

Merit: 1016

Quote from: Gatorhex on October 12, 2012, 01:13:30 PM

Quote

Because they get fucked over in VAT for far much more.

Yeah but we get free health care from birth to death as part of that 20% VAT deal so it's not so bad if think about how much your medical insurance costs Tongue

Yeah and people get the free health care even when they haven't put a penny into the system. Which is why the NHS is at breaking point. Angry

Gatorhex

full member

Activity: 126

Merit: 100

Quote

Because they get fucked over in VAT for far much more.

Yeah but we get free health care from birth to death as part of that 20% VAT deal so it's not so bad if think about how much your medical insurance costs Tongue

I just learned the USA introduced a law in 1982 to tax barter trades, which means all bitcoin trades and bitcoin income in the USA are taxable! On the upside it should mean all contracts in bitcoins are enforcable too.

dissipate

sr. member

Activity: 288

Merit: 251

Quote from: ?? on ??

I spoke with a tax inspector from HMRC back in February and he said its impossible for him to classify bitcoin and he wouldn't give me anything in writing but in his 'opinion' its closest to either spread betting or a future currency which are both essentially gambling and non taxable.

Hope this helps

That sounds quite implausible. I am not sure how capital gains laws work in the UK, but in the US, Bitcoin sales would almost certainly fall under capital gains tax laws. If you use your BTC to buy stuff, that would fall under barter tax laws.

Buffer Overflow

legendary

Activity: 1652

Merit: 1016

Quote from: Atlas on September 30, 2012, 11:52:49 PM

Quote from: dentldir on September 28, 2012, 12:17:38 PM

Quote from: ribuck on August 19, 2012, 11:16:47 AM

Don't forget that each UK taxpayer has an annual CGT exemption of somewhere around £10,000, and also that you can transfer assets tax-free to your spouse so that they can use their £10,000 exemption too.

Oh why don't we have that in the US? That's simply brilliant.

Because they get fucked over in VAT for far much more.

Yeah 20%.

Atlas

jr. member

Activity: 56

Merit: 1

Quote from: dentldir on September 28, 2012, 12:17:38 PM

Quote from: ribuck on August 19, 2012, 11:16:47 AM

Don't forget that each UK taxpayer has an annual CGT exemption of somewhere around £10,000, and also that you can transfer assets tax-free to your spouse so that they can use their £10,000 exemption too.

Oh why don't we have that in the US? That's simply brilliant.

Because they get fucked over in VAT for far much more.

Buffer Overflow

legendary

Activity: 1652

Merit: 1016

Quote from: dentldir on September 28, 2012, 12:17:38 PM

Oh why don't we have that in the US? That's simply brilliant.

Don't worry. You can rest assured, we get our pants pulled down and raped from other tax avenues. Angry

Lethos

sr. member

Activity: 476

Merit: 250

Keep it Simple. Every Bit Matters.

Quote from: ribuck on August 19, 2012, 11:16:47 AM

Don't forget that each UK taxpayer has an annual CGT exemption of somewhere around £10,000, and also that you can transfer assets tax-free to your spouse so that they can use their £10,000 exemption too.

For those interested: http://www.hmrc.gov.uk/rates/cgt.htm

dentldir

sr. member

Activity: 333

Merit: 250

Quote from: ribuck on August 19, 2012, 11:16:47 AM

Don't forget that each UK taxpayer has an annual CGT exemption of somewhere around £10,000, and also that you can transfer assets tax-free to your spouse so that they can use their £10,000 exemption too.

Oh why don't we have that in the US? That's simply brilliant.

ribuck

donator

Activity: 826

Merit: 1060

Don't forget that each UK taxpayer has an annual CGT exemption of somewhere around £10,000, and also that you can transfer assets tax-free to your spouse so that they can use their £10,000 exemption too.

bullioner

full member

Activity: 166

Merit: 101

Having done a bit more research it looks like if they are treated the same way as shares, an average of all bitcoins ever bought (except those accounted for by coins bought and sold on the same day, or by those acquired within 30 days following the sale) by the individual would be used.

Source: http://www.fool.co.uk/Your-Money/guides/Capital-Gains-Tax-Share-Identification-Rules.aspx

The article says, though, that those rules are "specifically in relation to shares". So perhaps those rules would not apply here.

It would be nice to know what the deal is here.

Stephen Gornick

legendary

Activity: 2506

Merit: 1010

Quote from: bullioner on August 15, 2012, 04:35:19 PM

I'm interested mainly in the UK situation for this, but also interested in how other countries with CGT handle this.

In the U.S., the default handling is FIFO. I believe you might be able to use other methods, but you cannot switch back and forth between whichever method happens to give you the best deal.

Related:

- http://en.bitcoin.it/wiki/Tax_compliance

bullioner

full member

Activity: 166

Merit: 101

I'm interested mainly in the UK situation for this, but also interested in how other countries with CGT handle this.

This must apply to other commodities where you can't tell one unit from another. What I'm wondering is: if you bought several different batches of coins at different prices, and then you sell some coins, which ones should you / can consider yourself to be selling for CGT purposes?

Is it "first in, first out"? "last in, first out"? Or can you choose, so long as each purchased unit is only counted a maximum of once in disposals?

Does the answer differ depending on whether I took delivery of the bitoins (in which case I can mostly distinguish them), or left them on an exchange the whole time (in which case I can't distinguish them)?

Topic: UK capital gains tax: when you sell a coin, which one are you selling? (Read 2451 times)