π¬π§ Thesecretinvestor - Tax Accountant π° πΈ π
12 Jan,
12 tweets, 2 min read
cryptotaxhelp.co.uk π¬π§
Below are 5 things to consider when assessing your CGT liability on your cryptocurrency Investment.
Below are 5 things to consider when assessing your CGT liability on your cryptocurrency Investment.
1 Make use of the CGT allowance
Every individual has an annual CGT allowance which currently lets them make gains of up to Β£12.3k free of tax (Fy20-21). If unused, the allowance cannot be carried forward into the next tax year, so it is advisable to use this tax-free allowance
Every individual has an annual CGT allowance which currently lets them make gains of up to Β£12.3k free of tax (Fy20-21). If unused, the allowance cannot be carried forward into the next tax year, so it is advisable to use this tax-free allowance
2 Make use of losses
It might be wise to sell some assets at a loss if the overall gain in the tax year exceeds the annual allowance. Gains and losses established in the same tax year must be offset against each other, so will reduce the amount of gain that is subject to tax.
It might be wise to sell some assets at a loss if the overall gain in the tax year exceeds the annual allowance. Gains and losses established in the same tax year must be offset against each other, so will reduce the amount of gain that is subject to tax.
Losses must be registered with HMRC within four years from the end of the tax year in which the loss has occurred.Β Youβre allowed to deduct certain costs involved with buying and selling (Β incidental costs of acquisition and disposal )Β Crypto Assets from your gain
These include: transfer fee, exchange fees, gas fee , fee for professional service such and lawyers and accountant relating to the buying and selling the crypto.
3 Transfer assets to your Spouse or Civil Partner
Transfer between spouses is currently exempt from CGT. This means that assets can be transferred between husband and wife or civil partners so that both annual CGT allowances are used.
Transfer between spouses is currently exempt from CGT. This means that assets can be transferred between husband and wife or civil partners so that both annual CGT allowances are used.
This effectively doubles the CGT allowance for married couples and civil partners. The transfer must be a genuine, outright gift.
4 Bed AND Spouse
It is no longer possible to use up some of your CGT allowance by selling crypto on which you had a gain, and then buying back the same crypto the next day; or within 30days, this was known as βbed and breakfastingβ.
It is no longer possible to use up some of your CGT allowance by selling crypto on which you had a gain, and then buying back the same crypto the next day; or within 30days, this was known as βbed and breakfastingβ.
However, Spouses or civil partners are permitted to buy back the shares sold by their spouse or civil partner immediately, so the gain is realised CGT free while enabling the family to retain the assets.
5 Contribute to a Pension
By making a pension contribution (where one has net relevant earnings), the tax on a capital gain can be reduced from 20 per cent to 10 per cent.
By making a pension contribution (where one has net relevant earnings), the tax on a capital gain can be reduced from 20 per cent to 10 per cent.
A pension contribution extends the upper limit of an individualβs income tax band by the amount of the gross contribution
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