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Where Taxpayers and Advisers Meet

When can CGT tax be deemed as income tax?

eivo14
Posts:8
Joined:Sat Apr 23, 2016 9:23 pm
When can CGT tax be deemed as income tax?

Postby eivo14 » Fri Jan 14, 2022 12:06 am

Hi,

I know this is a grey area but how do I better understand whether crypto trading would be considered as income tax? Does the amount I earn from it play a factor (e.g. if my earnings from this exceeds my earnings in my full-time job?) Additionally, if I do not have a full-time job, would that impact whether my crypto activity could be deemed as income or capital gains tax?

I've been reading the HMRC guidance on what constitutes trading activity but it's very, very grey.

Thanks!

darthblingbling
Posts:497
Joined:Wed Aug 02, 2017 9:09 pm

Re: When can CGT tax be deemed as income tax?

Postby darthblingbling » Fri Jan 14, 2022 11:48 am

Was there a profit seeking motive in purchasing/mining and selling the assets
Apart from buying/mining and selling, what other use would you have for these things?

eivo14
Posts:8
Joined:Sat Apr 23, 2016 9:23 pm

Re: When can CGT tax be deemed as income tax?

Postby eivo14 » Fri Jan 14, 2022 2:05 pm

Was there a profit seeking motive in purchasing/mining and selling the assets
Apart from buying/mining and selling, what other use would you have for these things?
Yes, although nothing was mined. It was just purchasing and selling.

I have mostly been involved in NFTs so they are assets I've been able to display and own as artwork in my digital galleries, or use in games. The regular-way tokens though have just been buying and selling for speculative purposes.

AGoodman
Posts:1419
Joined:Fri May 16, 2014 3:47 pm

Re: When can CGT tax be deemed as income tax?

Postby AGoodman » Mon Jan 17, 2022 12:10 pm

I'd look at it as similar to shares/options trading.

The starting point for an individual is that they are investments rather than trading.

It can only really become trading if you have a "high" volume of transactions or (obviously) set yourself up as a business. I'm not sure what would be considered "high".

More on the distinction here: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim56850


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