Postby jg418 » Mon Mar 26, 2018 6:02 am
wasn't sure if i needed to start a new thread here, or just post into this one.. I understand that gains/losses on Bitcoin are subject to CGT. i would like to know the practicalities of how this is supposed to work, particularly if you want to 'get your stake back'
Consider the case of someone who purchases Bitcoin on a number of occasions over the period of the tax year, at various prices, and then within that tax year, makes some sales. Because of the sharp price rise in Bitcoin for a limited period of time, the sale price is lower than some of the purchases (ie , making a loss) and higher than some of the earlier purchases ( making a gain). Unless you can specify which BTC individually are the ones sold , it is not possible to work out a loss/gain.
ie. suppose I bought 1BTC at 1K and later bought 1 BTC at 9k (in the same tax year) I would have 2 BTC and would have spent 10K
If I then made a sale of 1BTC at 6K, have I sold the one that cost 1K, (making a gain of 5K) , or have I sold the one I bought at 9K ( making a loss of 3K?) ... and how would one declare this to HMRC?
OR for tax purposes, can I fairly say, in the tax year I have made purchases amounting to 10K and made sales amounting to 6K, so do not have a CGT liability?.... or in the case of 'getting your stake back' if I sold enough BTC to the value of 10K, ie. the total money spent, and left the rest in BTC to accrue value (or not , as the case may be )
would there be a CGT liability at all, as effectively, over the year, no gains have been realized? Furthermore, if no gains are realized, is there a requirement to make a declaration to HMRC at all, of a null result for CGT?
Of course my hypothetical question is a nice simplification.. two purchases, one sale. How about if there were multiple transactions?.... would the same be true if the asset in question were shares? Can anyone advise ?