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UK HMRC finally provide tax guidance on cryptocurrency.

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3 minutes ago, GrayFox said:

This is the chicken or the egg dilemma. Did Data Protection Regulations come before the internet or did the internet come first? Did the SEC come first or did the markets? Nobody is going to be passing laws based on hypothetical and future use cases instead allow the market to mature and regulations to steadily grow. HMRC is regulating based on what is being done now. Most individuals are buying cryptos as investments in the UK and not to buy breakfast with. That is the current use case for individuals and not corporates who have to wait slightly longer for their answer.

I am buying and holding for my pension and hope to be able to live of XRP as it holds its value in relation to euro and dollar. As central banks use 'Weimar Republic' like policy on euro and dollar these currencies are diminishing my buying power on a day to day basis (in 2018 nearly 2% down). XRP is the new Euro/dollar and the policymakers know it. They have no control over it and most importantly they cannot print it.

Also I do not agree with the statement that most people holding XRP are using it for investment purposes. We are working on an 'Internet of Value' in which we can transact with XRP as a fast and immediate digital currency. With euros and dollars you can also transact digitally only this is slow and not immediate. A lot of people who I have spoken on this forum are doing exactly the same.

People or currency traders may hold dollars/euros/sterling etc..... are they taxed 20% on transaction?

Where is 'the level playing field' the government should provide for? This is simply killing a new financial transaction system.

Hopelfully they will see their error and adjust in time, otherwise courtcases will surely follow.

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7 minutes ago, GrayFox said:

This is the HMRC we are talking about. They are so good at taxing small UK businesses and individuals like there's no tomorrow and miss out on corporations like Google and Apple. Arguably small businesses pay a higher rate compared to corporations and keep the country going. The UK tax loopholes incentives big corporations who can afford to get their HQ in Ireland or elsewhere and avoid paying as much tax. Meanwhile Bob and his small plumbing business is getting destroyed because he can't afford to relocate his business address from bloody Yorkshire to Barbados.

If corporations paid a fair amount of tax in the UK, we wouldn't have a deficit and the NHS would probably survive. 

Agree with a lot of that... but I don't believe the NHS could survive even if the larger corporations were taxed "fairly". The main problem is the debt-based financial system & overpopulation, and even if the govt. could successfully eliminate the budget deficit, the debt will always go up (the budget itself is debt). The country is bankrupt really.

Edited by JA8

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13 minutes ago, GrayFox said:

This is the HMRC we are talking about. They are so good at taxing small UK businesses and individuals like there's no tomorrow and miss out on corporations like Google and Apple. Arguably small businesses pay a higher rate compared to corporations and keep the country going. The UK tax loopholes incentives big corporations who can afford to get their HQ in Ireland or elsewhere and avoid paying as much tax. Meanwhile Bob and his small plumbing business is getting destroyed because he can't afford to relocate his business address from bloody Yorkshire to Barbados.

If corporations paid a fair amount of tax in the UK, we wouldn't have a deficit and the NHS would probably survive. 

Your problem is solved sooner than you think friend: https://ec.europa.eu/taxation_customs/business/company-tax/anti-tax-avoidance-package/anti-tax-avoidance-directive_en

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3 minutes ago, cryptoxrp said:

I am buying and holding for my pension and hope to be able to live of XRP as it holds its value in relation to euro and dollar. As central banks use 'Weimar Republic' like policy on euro and dollar these currencies are diminishing my buying power on a day to day basis (in 2018 nearly 2% down). XRP is the new Euro/dollar and the policymakers know it. They have no control over it and most importantly they cannot print it.

Also I do not agree with the statement that most people holding XRP are using it for investment purposes. We are working on an 'Internet of Value' in which we can transact with XRP as a fast and immediate digital currency. With euros and dollars you can also transact digitally only this is slow and not immediate. A lot of people who I have spoken on this forum are doing exactly the same.

People or currency traders may hold dollars/euros/sterling etc..... are they taxed 20% on transaction?

Where is 'the level playing field' the government should provide for? This is simply killing a new financial transaction system.

Hopelfully they will see their error and adjust in time, otherwise courtcases will surely follow.

The only thing that boggles my mind is how on earth will fintechs and banks offer crypto savings account and custody solutions. How do they plan on paying interest to individuals on what has essentially been classed as a commodity that also has a industry changing use case.  It honestly makes no sense to me and they may have just shot down crypto savings accounts in the UK unless that part of the industry will take years to mature and they know it. Swiss bank accounts seem more and more lucrative at this point and dare I say even the Isle of Man is a good place to be "based" in. 

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Just now, GrayFox said:

Brexit :Laie_16:

A conspiracy theorist could say something here. Ultimately the UK is still in at that point so has to adopt. 

However assuming an agreement can be in place between the UK and EU there is no reason why it can't continue. 

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1 hour ago, JA8 said:


So for example, if you buy XRP using BTC, you must keep a record of the relative GBP value of the BTC at that moment, and HMRC will want 20% of any gain in the BTC price (the price gain since you originally bought the BTC). 

 

 

Would you please clarify this for me?

So I bought BTC and then converted into XRP straightaway. Say, next year I cash out that XRP. What do I pay 20% CGT on? BTC purchased price vs. current (time of cashing out) or XRP purchased price vs. current?

Thanks

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3 minutes ago, Centaurus said:

 

Would you please clarify this for me?

So I bought BTC and then converted into XRP straightaway. Say, next year I cash out that XRP. What do I pay 20% CGT on? BTC purchased price vs. current (time of cashing out) or XRP purchased price vs. current?

Thanks

Two events:

You sold you BTC for XRP (you pay CGT on the increase in value of your BTC between purchase and sale)

You sell your XRP (you pay the CGT on the increase in value of your XRP between purchase and sale).

These will (presumably), both be calculated against the relative GBP (£) value of each asset at purchase & sale.

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9 minutes ago, Centaurus said:

Would you please clarify this for me?

So I bought BTC and then converted into XRP straightaway. Say, next year I cash out that XRP. What do I pay 20% CGT on? BTC purchased price vs. current (time of cashing out) or XRP purchased price vs. current?

Thanks

I'm not sure to what extent duration of ownership plays into this, nor whether the newly published rules will be applied retrospectively, so it's probably best to talk to an accountant. But in theory, there are a couple of instances here where you may have to pay some amount of CGT: 

Fiat > BTC > XRP 
Go back and check what the BTC price was at the moment of purchasing it, versus the moment of exchanging it for XRP. You may owe a very small amount of CGT if there was a small gain here.

XRP > cashing out 
You'd calculate the price (in GBP) of XRP at the time you bought it, and the same at the time you sold it - then CGT would be due in respect of any gains there. 

Edited by JA8

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1 hour ago, JA8 said:

The way I see it is pretty simple. The government adds zero value to the crypto ecosystem, and only serves really to stand in its way with regulations and tax rules that inhibit innovation. And meanwhile, they want at least 20% of all the money it makes.

Ironic really that this ****ed up situation, dealing with the mob, is one of the reasons behind the invention of crypto in the first place.

This should've been expected though. I had no doubts that govts around the world were going to allow individuals to make a profit without them getting their cut. 

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2 minutes ago, King34Maine said:

This should've been expected though. I had no doubts that govts around the world were going to allow individuals to make a profit without them getting their cut. 

Agree, but crypto just doesn't work very well with taxation.

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2 hours ago, RippleGambler said:

This is wrong, they clarify the position later in the text: 

Only in exceptional circumstances would HMRC expect individuals to buy and sell cryptoassets with such frequency, level of organisation and sophistication that the activity amounts to a financial trade in itself. If it is considered to be trading then Income Tax will take priority over Capital Gains Tax and will apply to profits (or losses) as it would be considered as a business

 

"As set out in more detail below, there may be cases where the individual is running a business which is carrying on a financial trade in cryptoassets and will therefore have taxable trading profits. This is likely to be unusual, but in such cases Income Tax would take priority over the Capital Gains Tax rules. HMRC will publish separate information for businesses in due course."

It's not wrong. You have to be employed or running a business. See my initial comments. 

 

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