Topic: Warning UK Traders Tax Issue with Bitmex/Okex/Deribit! (Read 103 times)

''Have some seriously shit news in regards to using any of the crypto derivative platforms from the UK.

The HMRC have specific guidelines that state what can be described as capital gains & income. Spot trading can be regarded as capital gains tax, however derivative trading on non-FCA regulated exchanges falls under "Other Income". What this means is if you are hedging your stack on Bitmex / Okex / Deribit you are incurring a income tax bill at the time of the disposal (closing of trade) at the the going Sterling rate.

Essentially as the price falls you are racking up a massive tax bill. It gets worse though because you are acquiring BTC at the same time. As the market has dropped you are receiving an unrealised capital gains loss.

What this means is that you are being taxed massive on income once you realise the sale of BTC you incur a capital gains loss. The two would match up, however from a tax perspective there is no sideways relief from capital gains. It gets rolled forward to the following year!

This could mean for a lot of traders the bill is much larger than 50%. I am trying to work out how to reduce it this year, but last year seems locked in.

Anyone trading beware as the HMRC is going to want more of your hard earned money from this unfair clause. If anyone has a solution on how to reduce the bill please let me know.''