Cryptocurrencies

[OngBonga]

I seriously doubt that's how they look at it. Otherwise people could just keep trading up and never pay any tax. What are you going to tell them when you started with £200 worth of bongcoins and then a year later trade your bongcoins for a house? "It was a zero profit transaction, m'lord," is not going to get you out of it I don't think.

You're missing the point. I can't buy a house with bongcoins, I have to "dispose" of them by trading them for fiat, only then can I buy a house. There's where they should be taxing.

The point remains, if I trade 1 bongcoin for 10 spliffcoins, the value of 1 bongcoin at the instant of that transaction is 10 spliffcoins, it was my transaction that determined the value. That's zero profit, because I traded two assets of equal value.

CG and income are different things. You're making CG by trading, not income.

I hope you're right, because that reduces my tax burden. CGT is less. But I'm sorry but your word on this isn't enough, I'll need to take advice to make sure I'm paying the right kind of tax.

If it's more then pay some accountant £100 to sort it out

I think it'll be more than this, but essentially it's costing me nothing so long as it's less than the due tax, since accounting is tax deductible.

I doubt he will have to sit down and go through every single transaction though.

What keith posts implies differently.

Like if you own a pub, the taxman says pay us x% of your profits. You figure out your profits and pay the x%. You don't have to go through every single drink and food order and bag of crisps you sold and add them all up. Same thing here I would think.

I hope it's this simple. But when it comes to crypto, there's debate on what "profit" is. I'm arguing it's what gets turned from crypto into fiat. keith is arguing that it's the profit per transaction, which I believe is zero. This is why it's not very simple.

[Poopadoop]

You're missing the point. I can't buy a house with bongcoins, I have to "dispose" of them by trading them for fiat, only then can I buy a house. There's where they should be taxing.

The point remains, if I trade 1 bongcoin for 10 spliffcoins, the value of 1 bongcoin at the instant of that transaction is 10 spliffcoins, it was my transaction that determined the value. That's zero profit, because I traded two assets of equal value.

This (if it's true, and I doubt it is) only works as long as you always hold all your assets in coins. As soon as you buy something with them, or convert them into fiat to buy something, then you'll have to admit you've made money.

I hope you're right, because that reduces my tax burden. CGT is less. But I'm sorry but your word on this isn't enough, I'll need to take advice to make sure I'm paying the right kind of tax.

CG is what you gain from investments. Income is money you earn from a job, etc.. It's not all that complicated, google it.

What keith posts implies differently.

If you're audited they might do that. But to audit you they'd have to have a suspicion, like suddenly you're driving a bentley and living in Belgravia, while paying £30 in CGT. Otherwise I doubt they will.

I hope it's this simple. But when it comes to crypto, there's debate on what "profit" is. I'm arguing it's what gets turned from crypto into fiat. keith is arguing that it's the profit per transaction, which I believe is zero. This is why it's not very simple.

Could be that your profit isn't measured until you convert it back into fiat, but I doubt it, and it's kind of irrelevant in the long run. Either way you can't spend it without paying tax.

Like, say you buy some gold bars at a rock bottom price. A year later they're worth twice as much. Do you get taxed on the increase in value? I suspect you do, but even if you don't, at some point you will sell them again (convert into fiat), and you'll be taxed on the profit.