Wait for the market cycle low - expected within about 2 or 3 years time.
That’s understandable when it comes to NFT but it’s left uncertainty and a grey area when it comes to trading them and how it should be taxed.
The only thing I’ve seen which constitutes as income (as of 10th April 2021) and therefore taxable as income tax is the following:
- airdrops (if you did something to “earn” them which is a bit hard to understand)
- income from earnings
- mining crypto
The staking and mining one is a bit confusing, both have this quote:
Whether such activity amounts to a taxable trade (with the tokens as trade receipts) depends on a range of factors such as:
- degree of activity
There’s not clarity regarding these factors, who determines what level of risk or commerciality will result in tax for example?
I’ve been airdropped various tokens in the past for using their dapp or other DeFi dapps in the very early days vs some other tokens which were airdropped randomly to me which is where it would be difficult to understand whether or not either should be considered income, I didn’t really do much to “earn” either.
On the other hand I’ve seen Venture Capitalist firms having been allocated a huge sum of the total supply of a token for a dapp, given how they’ve invested in that dapp from the early days in terms of seed funding or Series A / B funding, surely that would be the kind of activity deemed as having “earned” the airdrop?
Thanks for the information! Any time I’ve been buying / selling shares it’s been on such a small level I’ve never hit above that tax-free capital gains threshold so was only concerned how much profit I had made at the end of the financial year.
TBH it wouldn’t be the first time Monzo have been left behind. IBANS’s, Coronavirus business support, cheque imaging, and leadership capable of bringing the bank to profit to name a few
I think that is an unfair comment tbh, Monzo appear to be really struggling in terms of actually making a profit so maybe they just thought they would spend the money elsewhere like planning the excellent Plus products we have all been waiting for then the additional add ons that would hopefully make them money.
Good for you
You don’t run before you can walk. Look at Starling, it’s not a very interesting product overall but it is a decent banking service that provides ALL the basics. Let’s not forget you can pay in cash 1) without having to pay and 2) you don’t need to educate the person you’re paying your money into how it’s done
I do often wonder if Monzo could turn back the clock and be a budgeting tool with add on prepaid card if they would. Even if they could/did though, they’ve been beaten to it by Yolt!
Income, staking, and mining are all taxable regardless of commerciality. Similar to how everyone is potentially liable for income tax for earning on your other assets (e.g. loaning your property, driveway, car) or for providing casual services (e.g. occasional odd jobs).
I think the degree of commerciality point is to do with whether you are taxed under rules for individuals or under rules for trade/business activities (as well as whether you should be taxed for receiving airdrops/rewards). Determining where the threshold lies is probably an issue that exists for income/profit generating activities with all asset classes, not just crypto.
I would suggest that by simply using an app you haven’t really provided a service in any meaningful sense, so wouldn’t consider it taxable income. But I’m no accountant. I’m just an interested random on the internet!
As a business, they’d certainly have different considerations than individuals. I haven’t really looked at the guidance for businesses.
Since shares can be held in an ISA I think its best to use an ISA so you never have to worry about taxes on those (unless your lucky enough to be able to invest more than £20k per year and therefore exceed the annual ISA allowance!)
For what started as a joke, it turned pretty dark in the end
I’m not well versed on DOGE coin but how did things turn out dark?
Things soon turned dark, however.
Seems like it’s missing an ending to that article. I was almost expecting a paywall saying “Click here and subscribe for only $9.99 to find out how dark”
A coin based on a meme doesn’t seem dark unless I’m missing something.
I’m glad you came to the same conclusion as me, I had to reload the article twice just in case the actual ending was missing.
Pretty much a pointless article
It’s just the blurb for the podcast! It’s supposed to leave you hanging
Edit: The audio and transcript are both on that page.
Well it did the opposite, clicked away 🤦
Looks like clickbait to me I had a very quick scan of the transcript and it sounds rather dull tbh.
HSBC feeling threatened…
Wonder how many clients hold TSLA
A bit ironic for HSBC to have issues with crypto, what with their penchant for money laundering. You’d think they’d be really into it.
Things tend to end up swinging the other way though, so they’re now super risk averse to anything. Knee jerk reactions are always bad.
HSBC are going to regret this decision if they start telling any clients that hold Tesla that they need to exit or have their account closed.
Indeed pot calling the kettle black with HSBCs history.
I can’t see it happening it would be business suicide.
On the flip side seeing Morgan Stanley and Goldman Sachs approving with SEC and dipping their toe in, plus BlackRock getting involved in the last 30 days the next few months are going to be interesting.
Implied volatility is at a low, it’s becoming the perfect hedge against the dollar.
HSBC are going to lose out to the other three key players Barclays, Lloyds group, NatWest group which have shown positivity towards crypto.
Roll on 100k BTC, altcoin season in full swing
It’s a personal choice for the bank and they have always operated in a more conservative manner. They have huge resources and millions of accounts world wide. I doubt they’re worried now, if things change, they can jump.
I do suspect some will be caught out by the various taxes, if these are treated as investments. All your UK bank transactions are sent to HMRC, they know what’s going in and out. The rules around investment taxes are complex and you have to track the gains from each purchase. Some of the new trading platforms explain it will. There are no ISAs yet for crypto currency, or at least none that I’m aware.
There’s no crypto ISA yet, I’m guessing a long time before they U turn. The FCA were recently bullied by the banks and government to stop crypto backed ETNs as of the 6th Jan under the guise of “helping protect retail”. So it was a case of load the boat prior as they are in sell only mode for UK investors. The rest of the World can happily buy and sell ETPs and more are being released each month.
So unfortunately all crypto gains are treated like stocks in a general investment account.
I can imagine anyone holding BTCE and the likes won’t be hitting that SELL button anytime soon.
I personally think at this point the horse has bolted in terms of the banks stopping crypto becoming established. There will be a point of HSBC accepting their fate, or will reverse these ideas after they start losing out.
I mentioned Morgan Stanley who originally was anti-crypto then u-turned and now value BTC at 130k a coin.
This is where it gets tricky even if they see £100 fiat going into a KYC exchange and £1000 coming back out they can only guess it was that £100 used.
There’s many issues like transferring wallet to wallet and exchanges not requiring KYC which means they wouldn’t really have a clue what gains have been made from what by who.
You can just keep profits from trades as stablecoins so you only really need to pull funds back whenever you want to cash out to fiat.
You can transfer those funds to a crypto debit card and withdraw. Its still about honesty.
The exchanges aren’t required to submit their clients transactions either.
You also have DEXs or decentralised exchanges where there is no single authority. These are direct deals.
The only thing holding DEX back currently is a gas war but that’s being resolved which opens the gates to hundreds of millions only doing small trades and investments on Polkastarter and the like.
So it would be like HMRC finding a needle in a haystack. Only the haystack is the size of England.
Its going to be a big issue for the government in hoping everyone is declaring those x100 gains.
Its not like general investment accounts where traditionally those investors have been old money and follow the rules.
I can imagine most crypto users are anti-establishment so it’s going to be tough getting people to cough up CGT