UK Anons Vs HMRC

Serious thread please.
Been reviewing HMRC stance on crypto last few days after selling some of my link stack. Here is what I gather.

Any transaction (crypto to crypto or crypto to fiat), you need to take the instantaneous market sterlin value, and that's what is subject to Capital Gains Tax.

This means, even converting to tether rather than fiat, is still a taxable event where HMRC is concerned. Likewise any trade you've made in the past is also liable to capital gains tax.

Over the last three years I've made around 10 large trades. Initially purchasing the likes of Eth and LTC, then moving portfolio into a few Alts and then finally (recently) cashing some of the ALTs (link) back into GBP. The recent pump has been to much like 2017 for my liking and I want some profits.

Technically I assume I was supposed to declare any gain/loss when I made the initial move from ETH and LTC to Alts, but I obviously didn't because back then (2017/2018) crypto was still basically gambling and like fuck was I going to go out of my way to let HMRC I was involved.

Now I've converted a large amount to fiat, I've found myself in a position I can't win.
If I contact HMRC and attempt to declare the recent gains, I imagine they will dig and realise I didn't pay tax in 2017/2018.
If however I say nothing I have no way to get the money off coinbase and into my account.

Does anyone have any experience with HMRC contacting them about their coinbase account? Seeing as I've already not paid tax 2017/2018 on the crypto trades, I figure I'm already fucked as soon as HMRC get wind of anything crypto.

I'm thinking of just siphoning off around £10k from my coinbase account into something like Fire and then Revolut/Monzo each year. Then just spending that on living costs.
If fire/Revolut/Monzo report my annual balance to HMRC, they're just seen I'm below £10k in and out and hopefully it won't trigger any investigation on their behalf?

Anyone else in a similar situation/have experience?

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How much are we talking here?

150kGBP, about another 150k in crypto (mostly link).

I dont mind if it takes me 10 years to cash out, chances are ill buy some more crypto anyway after this bubble crashes

just wait like 20 years for ppl to realize fake internet money is a better medium of exchange than fiat lol

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And what are your living/employment arrangements?

Originally had planned on doing that. Just wait for crypto to become an acceptable medium and buy a house with link/eth etc. But I bottled it and now I have a shed load of fiat + if HMRC look on my coinbase account theyre see a blatent crypto/fiat trade and want tax...

thieving bastards already take my income, why cant they leave our happy internet money alone

I'm full time employment and company do all my taxes via PAYE. This is why im reluctant to contact HMRC about crypto because as far as theyre concerned, im just a good citizen paying my way

Does Goybase directly report to your tax jews? Holy shit. Use a Fiat off ramp that doesn't.

Did you cash in/out with BTC or ETH?

I did that from 2017 gains, just reported the fiat I put in, and the fiat I took out. Didn't do any reporting of the different trades I did with the ETH i initially bought, HMRC never questioned it. I also did it with an accountant, who have insurance that says if they report the wrong amounts and you've additional charges, they claim this on their insurance.

The way I saw it (and agreed with accountant), I don't have to report every penny. HMRC will be so busy chasing the people who cash out millions and pay zero CGT, that as long as I pay something, that puts me way down the target.

If there's a few of you trying to outrun a tiger, you don't need to be fastest, just not the slowest.

I can't work this out. From reading terms / conditions, it looks like IRS and Coinbase already have a system where coin base automatically sends IRS updates on US citizens. For all other countries, Coinbase says you need to declare everything yourself. This leads me to believe as long as I dont bring attention to myself, then how on earth could they find out? There must be 10,000s other UK residents in similar situaiton

Fellow UK user here, have dealt with HMRC before for corporation tax etc but not for CGT.

I've been in crypto since 2017 and have made hundreds of trades.

There's no way I can go back and work out all the gains/losses in GBP at the time of trades, and neither can HMRC. Especially when you include future market trading. Unless you're cashing out millions, they won't even try to work it out, they've got bigger easier fish to fry.

Honestly just take your money into crypto minus your money out, and pay the CGT on that. Or if you're up for the risk, take it small chunks under £8k and hope they don't come investigate it.

On the small chance they do and it's your first offence, they'll just double whatever you were supposed to pay (assuming they can actually work it out).

Personally I'd take the risk if it's sub £50k

Not a 'safe' answer by any means, but do you have access to anonymous IBAN bank cards? Poland used to be famous for them. There are exchanges out there, given you're willing to pay the fees, where you can bind your IBAN to a BTC deposit address. Deposit your coins, next day the cash is on the card and none's the wiser.

I cashed in via
Barclays > Revolut > Fire > Coinbase. Euro to Eth & LTC.

I then did a load of stuff in between, ending up with a bunch of link on Binance and some other alts on a ledger.

I have since moved the link back to coinbase and traded to GBP.

My trading record on coinbase looks like I brought a bunch of ETH, sent it off and then 3 years later a bunch of link turns up and i immediately convert it to GBP.

When you spoke to your accountant did he mention capital gains allowance?

"safe" as in tax compliant btw

It's like they want people to evade them, making it as complicated as possible. Anyway there's plenty of ways to get out without them knowing, like buying gold bullion, or just sellling it p2p, or even better - just stay in and pay for everything with swipe/crypto.com cards. They would benefit from making it a simple pct of whatever you cashout though, makes no sense

If it doesn't explicitly mentions the UK I assume they don't. I know neither my small local exchange, nor Kraken or Bitstamp have ever reported anything. The issue then becomes the bank, if you ladder it its suspicious, if you cash out in one big chunk its also suspicious. My method is dozens of brick and mortar and internet bank accounts around the world all with less than 10K in them some only receiving 100 bucks a year. Works since 2013, never paid a cent of taxes on crypto gains.

I think your in a better situation then you think. I run a small business in Guildford so i'm fairly used to our tax system. I only incorporated 2 years ago, before that I used the self assessment system which is standard practice. In 11 years of self employment i've never shown a receipt or invoice; do not underestimate how under resourced HMRC is! My advice would be to either contact an accountant and go through it with him and work out what your liability would be, bear in mind that if you declare then there won't be any penalty plus your non taxable allowance will carry over from the previous years. Alternatively investigate the possibility of an OTC brokered transaction which could be the way to go.

Appreciate the input, out of interest what have you done?
Originally I put in about 25k. 4k of which eventually ended up in link and the rest in a bunch of shit Eth alts and is not worth hardly any.
So from a crypto in vs out situation, its 4k in and 150k out so I would be paying 20% on 146k which seems like a lot.

Is that the deal then? double the tax you havent paid? Would be looking at a 60k risk then :/

pay your fucking taxes, just use koinly to work it out with your trade history

I file a Self Assessment every year under the tuition of my retired tax inspector aunt. She literally told me to just make up whatever numbers I felt like because their department has been absolutely gutted in the last few years and they don't have the resources to chase anyone that isn't worth millions in dodged tax.
If you're smart about it, they'll not come near you. Real simple maths, if it costs more than they're likely to retrieve to come after you, they just don't bother.

I figured that. Large deposit would flag and regular transactions would also flag. I thought about random amounts between 500 to 2k spit between Revolut and Monzo. I would send them from a fire account which would recieve from Coinbase.

I do appreciate I may be over complicating it. As user says, HMRC are under resourced and if im struggling to work out what ive traded last three years, then theyre going to have a harder time...

Move to Sark dyor

You have a cgt allowance of like £13k and you probably didn't owe much more than that with your trades in 2017/18 by the sounds of things. You are in a similar position to me with around the same amount of link. I just plan on getting a professional involved, give him a copy of the trade histories I do have and let him do the rest. Might have to pay some minor penalties if your over the allowance. Just pay the 20% mate it's really not worth looking over your shoulder for the rest of your life if your remaining link keeps mooning

yeh same thing I did. Just report what you put into coinbase, and what you took out. I moved all my ETH into alts, and then returned a fuckload more without explanation.

Do it with an accountant, they'll deduct all the trading fees as business expenses, and have the insurance.

Capital Gains Tax means you can take out £11.5 a year without tax. So you could either keep all your gains in a stablecoin (and pray it never collapses) and take out £11k a year until your done, or take it out and pay tax on whatever you have above that. Rate depends on your income.

If my company already do my taxes via PAYE, this is why I dont want to make more trouble for myself by declaring anything on the side. Especially when my name already is on the 'white' list.

Good to hear. Ok will look into an accountant. This seems to be group conclusion.

I could happily leave the main bulk of the fiat on coinbase which gives me the option of buying back in, in the future. So providing the accountant things its legit to cash out like 30k, keep the CGT allowance and pay 20% on the rest, then happy days.
I suppose I could rinse and repeat for a few years to save money in the long run

Talk to an accountant about it, but you might be able to swing something creative if you're looking to buy a house with it.
What if you started a company, funded the company with your gains, and used the gains to buy a house which you then "rent" from yourself? This is total napkin-at-the-bar thinking, but a decent accountant/financial advisor should be able to come with something for you.

>£11.5 a year
how poor do you think we are?

So far I've only cashed out about £10k, not declared as its under the threshold. I have about £90k in USDT which is my "banked" winnings. The rest is still in btc eth link

I'm still not decided on how I'll cash out but as others have said, just declare something and they'll likely never follow up. If they do, play dumb and they'll let you off any penalties.

As someone fairly new to the game, what can I start doing now to avoid getting my ass fucked in the future? Cheers for the based thread fellow bong

The danger if you leave it there is it's uninsured, so you're fucked if Coinbase goes bad. Or if legislation changes. You'll also lose real term money from inflation if it's in stable coin.

But the biggest risk is the market goes south, and you think you're buying a dip, and it just gets worse.

My advice, look at another asset, like a rental property. Pay the CGT and take a chunk of money out to buy something not crypto that generates revenue. Buy a house with 50% LTV mortgage, and rent it out. Diversification in the real world isn't buying different alts, it's spreading across multiple asset classes.

Really I should have thought about it a bit more and gone into USDT as you say, and kept that as the banked cash for future. Although thats still technically taxable, they would have sod all chance of finding out especially if it was via a dex.
But now its all sitting there in GBP and making me nervous.

I live near a one of those roads with like 30 hair salons on (money laundering central) and ive found an account on the street. I imagine theyll be well versed in 'creative' thinking so will see what they can come up with.

You can take more out for sure, you just get taxed on it. If OP just wants tax free hookers and blow cash every year for a month, take out £11k a year

Move it from USDT to TUSD, or some better stable coin. If the mother crash happens, USDT will be at the centre

Less worried about coinbase going south now, its as safe as were going to get in crypto make believe land. But agree diversifying into something tangible would make sense.

I moved into a house with partner at start of year so have just taken out a mortgage. Would be getting a buy to let mortgage if I did it another time and that just sounds like a right pain.

True re buying the dip, dont want to get into the habit of swinging anything.

you're a tiny fish for them
they wont give a fuck about your case

This

look at other options. Commercial property, buy to let, FTSE index tracker, gold, whatever. Having cash now while we're entering a period of high risk of inflation runs the risk of wasting all your gains.

assuming you want to be legit:
1. get an accountant that is familiar with crypto. literally google crypto tax advisor uk or some shit
2. sign up to crypto tax site like koinly or recap - they use read-only apis and calculate everything for you. really fucking easy
3. forward this shit to the accountant (current and previous tax years)
4. ask the accountant about tax investigation insurance if you're worried

regarding previous tax years: accountant will sort this for you but you'll probably have to pay a late delivery penalty.