Bitcoins?

[rxe]

p1stonhead said:

Yeah I dont see it as being any less anonymous than normal investments when you actually transfer it back to your bank.

But...and not relevent to many these days;

What if you mined them? Basically got given some computer files worth nothing (for doing a bit of calcuation work) which ended up as worth something? Does that still count? There would be no 'purchase' record that way. Does 'mining' count as 'work' so would come under income tax somehow? Income tax should be paid in the year the work was done but if the 'reward' for the work was worth zero back then? Would be interested if anyone knew.

I bet HMRC arent that up to speed with cryptocurrencies yet.

It would be the same as any other gain. You sell a thing for £20k. What did that thing cost you? Er, I mined it. So it cost you nothing? Er, no, my leccy bill is huge. Ok, prove to us that your huge leccy bill is due to the mining of that thing, otherwise the acquisition cost is deemed to be zero and you owe us 20% (less thresholds etc) of 20k.

It would be exactly the same if you (say) were left a gold bar on the quiet by a relative seeking to avoid IHT. When you come to sell it, you have to say what the acquisition cost is, and evidence that. Clearly if you sell something worth peanuts, you’ll get away with it, but try selling 50k worth of gold and see how far you get!

[p1stonhead]

rxe said:

p1stonhead said:

Yeah I dont see it as being any less anonymous than normal investments when you actually transfer it back to your bank.

But...and not relevent to many these days;

What if you mined them? Basically got given some computer files worth nothing (for doing a bit of calcuation work) which ended up as worth something? Does that still count? There would be no 'purchase' record that way. Does 'mining' count as 'work' so would come under income tax somehow? Income tax should be paid in the year the work was done but if the 'reward' for the work was worth zero back then? Would be interested if anyone knew.

I bet HMRC arent that up to speed with cryptocurrencies yet.

It would be the same as any other gain. You sell a thing for £20k. What did that thing cost you? Er, I mined it. So it cost you nothing? Er, no, my leccy bill is huge. Ok, prove to us that your huge leccy bill is due to the mining of that thing, otherwise the acquisition cost is deemed to be zero and you owe us 20% (less thresholds etc) of 20k.

It would be exactly the same if you (say) were left a gold bar on the quiet by a relative seeking to avoid IHT. When you come to sell it, you have to say what the acquisition cost is, and evidence that. Clearly if you sell something worth peanuts, you’ll get away with it, but try selling 50k worth of gold and see how far you get!

So basically, if you mined any, spend them at places which accept bitcoin and no one will ever know you ever had them

[Ted2]

There's always LBC who will gladly take them off for you for a small premium to keep you off HMRCs radar.

[anonymous-user]

98elise said:

Atomic12C said:

Murph7355 said:

And that's where the fun starts.

How are people going to declare their capital gains? How many are even realising these gains?

Correct me if I'm wrong, but they only become gains if you 'cash in' your bitcoin ?

If its treated like shares then yes. The paper value is meaningless until you sell.

If its treated as money then it might be different. We need a forex trader to chime in.

It's treated as a foreign currency/commodity. Until you realise the gain there is nothing to tax. Its worth noting that to realise a gain for CGT you either sell it (ie receive GBP) or spend or give it away (in which case it's assumed you sold it at the market price).

[anonymous-user]

p1stonhead said:

Ted2 said:

p1stonhead said:

fblm said:

P1stonheads... HMRC position and accountants advice on crypto is clear.

Whats the clear advice on mined coins?

Let's be realistic here : no-one is going to be mining any coins (BTC at least) unless you happen to have a handy power station in your back garden so the question is moot.

That’s not an answer to the question though is it.

It was only borne out of curiosity. There are people sitting on large quantities due to mining.

It's a capital gain once realised. Keep a record of your mining costs and subtract from sale price for the gain. In practice anyone sitting on large mining gains likely made them a while back so the costs will be negligible compared to your gain at todays price. I get the impression that many people think as this is all so new and HMRC are apparently well behind the curve, that they can get away with it and they probably can but it's clearly tax evasion. You're welcome to roll that dice if you want but the 1300+ crypto's now have a market cap approaching $1/2Tr. Tax authorities are not going to ignore that capital gain for long!

[TLandCruiser]

I think litecoin is another currency to keep an eye on, I don't think it will ever suppress bitecoin, but I believe there's still big gains to be made over the long term

[g4ry13]

TLandCruiser said:

I think litecoin is another currency to keep an eye on, I don't think it will ever suppress bitecoin, but I believe there's still big gains to be made over the long term

After it's gone up about 100% over the last 3 days...

But yes, I concur and was/am looking to buy some.

[limpsfield]

We need to to do a poll.

“I am thinking of/exploring how to/weighing up when”

regarding buying bitcoin and other cryptos. Because, trust me, when the ditherers jump in because they think the planets are aligned and the risk has gone, then that is the top.

[jas xjr]

i heard something on the radio today, not sure if i heard correctly. apparently there is now some sort of atm placed in convenience stores etc , where you can buy / sell bitcoins.

[limpsfield]

limpsfield said:

We need to to do a poll.

“I am thinking of/exploring how to/weighing up when”

regarding buying bitcoin and other cryptos. Because, trust me, when the ditherers jump in because they think the planets are aligned and the risk has gone, then that is the top.

Here’s the poll

https://www.pistonheads.com/gassing/topic.asp?h=0&...

[g4ry13]

jas xjr said:

i heard something on the radio today, not sure if i heard correctly. apparently there is now some sort of atm placed in convenience stores etc , where you can buy / sell bitcoins.

They have ATMs in London where you can get cash in exchange for Bitcoin. Not sure whether you can really get £20k out the machine now though!

[Luke.]

jas xjr said:

i heard something on the radio today, not sure if i heard correctly. apparently there is now some sort of atm placed in convenience stores etc , where you can buy / sell bitcoins.

There are. Been around a little while. Used to walk past on on Rathbone Place, just off Oxford Street.

[Rollin]

For a gamble/investment with no intention of spending them, why would you piss about with the risks of fraud, theft or loss of bitcoin when you can buy a tracker....in an ISA?

[g4ry13]

Rollin said:

For a gamble/investment with no intention of spending them, why would you piss about with the risks of fraud, theft or loss of bitcoin when you can buy a tracker....in an ISA?

You won't be able to take advantage of any forks which occur?

[limpsfield]

g4ry13 said:

Rollin said:

For a gamble/investment with no intention of spending them, why would you piss about with the risks of fraud, theft or loss of bitcoin when you can buy a tracker....in an ISA?

You won't be able to take advantage of any forks which occur?

I am with Rollin on this. I would rather have the speed of execution, the ability to cash out and the security of a listed tradeable product rather than all this wallet stuff.

[g4ry13]

limpsfield said:

g4ry13 said:

Rollin said:

For a gamble/investment with no intention of spending them, why would you piss about with the risks of fraud, theft or loss of bitcoin when you can buy a tracker....in an ISA?

You won't be able to take advantage of any forks which occur?

I am with Rollin on this. I would rather have the speed of execution, the ability to cash out and the security of a listed tradeable product rather than all this wallet stuff.

If you owned Bitcoin then you would be able to take advantage of Bitcoin Cash, Bitcoin Diamond, Bitcoin Gold.

Every time there's a fork you get a piece of that - it's basically free money that's being handed around. Bitcoin Cash is about $1400 and Gold is $250.

There are upsides and downsides to both. Are there any financing charges/fees to hold these products? I am sure there are other advantages to physically holding coins which I may not have mentioned.

[toastyhamster]

Can somebody explain where the "free money" comes from in the event of a fork, sure, it can be converted to BCH or whatever, but then when people withdraw into USD who actually funds this? Surely the exchanges can't be making enough money?

[Murph7355]

toastyhamster said:

Can somebody explain where the "free money" comes from in the event of a fork, sure, it can be converted to BCH or whatever, but then when people withdraw into USD who actually funds this? Surely the exchanges can't be making enough money?

Someone else is buying at the other side. Just like anything else, the exchanges will be making money either way.

It's not free money. The last person holding their USB stick when the arse falls out of it is where the money comes from. So not "free" at all.

Of course bitcoin might defy all other systems and trends since time began and continue exponentially upward forever.

It won't though

[BlackLabel]

What’s the most valuable thing you can currently buy, in the UK, where the seller will take bitcoin? If for example you could buy a house with bitcoin would you still need to pay hmrc CGT?

[anonymous-user]

BlackLabel said:

If for example you could buy a house with bitcoin would you still need to pay hmrc CGT?

For the third time on this thread yes. Capital gains are realised when you sell, buy something with it or give it away.