Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

nxbyveromdwjpg

barney, if someone had BTC in 2017 and traded it for ETH in 2017 and has no intention to sell the ETH for euro until 2020, how in practical terms are they supposed to pay the revenue for the trade before the deadline?

Are we saying that they can only trade 67% of their BTC for ETH, because the other 33% must be converted to euro to pay the tax man?

AlmightyCushion

Amirah Cold Cafe wrote: »

barney, if someone had BTC in 2017 and traded it for ETH in 2017 and has no intention to sell the ETH for euro until 2020, how in practical terms are they supposed to pay the revenue for the trade before the deadline?

Are we saying that they can only trade 67% of their BTC for ETH, because the other 33% must be converted to euro to pay the tax man?

The same way people do it for shares/currency/other assets. Take your scenario above and replace BTC with Dollars and ETH with Yen. This person is in the same situation. How do you propose this person pays the taxman before the deadline?

Peregrinus

Amirah Cold Cafe wrote: »

barney, if someone had BTC in 2017 and traded it for ETH in 2017 and has no intention to sell the ETH for euro until 2020, how in practical terms are they supposed to pay the revenue for the trade before the deadline?

Are we saying that they can only trade 67% of their BTC for ETH, because the other 33% must be converted to euro to pay the tax man?

The revenue doesn't care how you finance your tax payments. Maybe you pay it out of other savings. Maybe you borrow money to pay it. Maybe you pay it out of your wages. It's your problem, and your choice; not the Revenue's.

Yes, if you have a very large capital gains tax liability, depending on your circumstances you may have no way to pay this except by not reinvesting a part of your disposal proceeds. But that's not a phenomenon unique to cryptocurrencies; it can arise on the disposal of any asset. There's nothing new or unusual here.

Peregrinus

lifeandtimes wrote: »

Just wanted to ask, everyone in this thread is an upstanding citizen and wants to pay their tax.

But just to play devils advocate what is the legal way to "avoid" paying capital gains tax?

If you made say a million before cashing it into a bank account, would you need to leave the state "travelling" for best part of a year for 2 years to technically not be a resident and then come back or because you made the gain while living here it will always be due? Could you lose citizen ship for being gone for that amount of time?

I'm interested in knowing, not that id be arsed going through all that avoid it, I'm ok to pay the 33%

Depends on what you mean by "made a million".

If I have a holding of crypto whose value has risen by a million euros since I acquired it, I haven't "made a million" yet. I will make a million when I dispose of the crypto in return for either (a) 1 million euros cash, or (b) some other asset - e.g. another crypto - which is worth a million.

So, if you're sitting on a large unrealised gain - your crypto has risen in value hugely - you need to become non-resident in Ireland and remain so for three years (and ensure that you don't become resident in some other jurisdiction where you would have a similar tax liability). Then you can dispose of your crypto and incur no Irish CGT liablity.

The problem, of course, is that the Lord giveth and the Lord taketh away. If you wait three years before disposing of your crypto, it may not be worth a million euros any more. You'll have avoided the CGT, but you'll also have avoided the gain.

Cryptonovice

I bought Litecoin on coinbase on 23rd December 2017. Left it there since. I bought Ethereum on 27th December on coinbase and sent it to Binance to swap for Ripple. I bought more Ethereum on the 1st and 2nd of January and then sent it to Binance and swapped it for Tron and Funfair.
I have not touched/moved/swapped anything since....I want these to sit for 5 years and hopefully I might make a few pounds.....

Can someone please explain to me what are the steps I now need to take in this 5 year period...are the 2017 buys to be reported this year and the 2018 buys next year.. I am a complete novice..I am a paye worker..what form do I use...
Ive asked revenue this and got no reply

Peregrinus

Cryptonovice wrote: »

I bought Litecoin on coinbase on 23rd December 2017. Left it there since. I bought Ethereum on 27th December on coinbase and sent it to Binance to swap for Ripple. I bought more Ethereum on the 1st and 2nd of January and then sent it to Binance and swapped it for Tron and Funfair.
I have not touched/moved/swapped anything since....I want these to sit for 5 years and hopefully I might make a few pounds.....

Can someone please explain to me what are the steps I now need to take in this 5 year period...are the 2017 buys to be reported this year and the 2018 buys next year.. I am a complete novice..I am a paye worker..what form do I use...
Ive asked revenue this and got no reply

You may want to talk to an accountant, to get advice that you can rely on, rather than going on what anonymous unqualified contributors to an internet forum (such as myself) say.

But, to start you off, as I understand it.

1. You generally do not have to report the acquisition of assets, unless the Revenue ask you to complete a long form tax return which includes questions about this. In your circumstance, they are very unlikely to ask you to do this. Don't worry about this unless it happens.

2. It's disposals that you need to worry about.

3. You disposed of Eutherium on two occasions - once in 2017 when you swapped Eutherium for Ripple, and a second time in 2018 when you disposed of Eutherium for Tron and Funfair.

4. Assuming that you bought and then disposed of the Eutherium in a short period, the price/value of the Eutherium probably did not move very much, and therefore you probably did not make any significant gain/loss.

5. You have an annual small gains exemption of EUR 1,270 and by happy coincidence your two disposals fell in different years. So if your gain on the first disposal was less than EUR 1,270, or you had no gain at all, you have no CGT liablity; it's within your small gains exemption for 2017. (Your gain is the difference between what you paid for the asset, and what you disposed of it for. So if you paid EUR 1000 to buy EUTH, and then swapped them for Ripple worth, say, EUR 1050, you have a gain of EUR 50.)

6. And the same goes for the disposal you made in 2018.

7. If you do have a CGT liability, you need to calculate and pay it. Any liablity in respect of the 2017 disposal needs to be paid by 31 January 2018 (so you're already late; get moving!); any liability in respect of the 2018 disposal needs to be paid by 15 December 2018. In each case, you calculate what you think is due and send it off to the Revenue with a form called a "CGT Payslip", which you can download from the Revenue site.

8. Even if you have no CGT liablity, you do have to report disposals and the gains/losses. You do this by completing form CG1 and sending it to the Revenue. For the year 2017, you should submit for CG1 by 31 October 2018. For the year 2018, you need to submit by 31 October 2019.

9. If you stick with your plan, you then have nothing more to do until you dispose of your crypto in 5 years time, at which point you have to caculate your CGT liability, if any, pay it, and report the disposal of the crypto.

Noctifer

Let's say I payed taxes for last year. How exactly would Revenue go about to figure out if what I paid is the correct amount?

Peregrinus

Noctifer wrote: »

Let's say I payed taxes for last year. How exactly would Revenue go about to figure out if what I paid is the correct amount?

From the information they have through the various mechanisms already in place - e.g. from the information supplied by your employer. If that isn't enough to establish whether the correct tax has been paid, they can ask you to complete a tax return for the year (and you must comply).

Are you thinking specifically of capital gains tax?

Noctifer

Peregrinus wrote: »

From the information they have through the various mechanisms already in place - e.g. from the information supplied by your employer. If that isn't enough to establish whether the correct tax has been paid, they can ask you to complete a tax return for the year (and you must comply).

Are you thinking specifically of capital gains tax?

I trade on an exchange. I pay CCG for the gains. They decide to audit me. How would they know if what I paid is the correct amount?

relax carry on

Noctifer wrote: »

I trade on an exchange. I pay CCG for the gains. They decide to audit me. How would they know if what I paid is the correct amount?

You show your CGT workings and provide the backup documentation to prove that your workings are correct.

Noctifer

relax carry on wrote: »

You show your CGT workings and provide the backup documentation to prove that your workings are correct.

So you are saying I could fake it all and they would have no way of knowing that?

Peregrinus

From the information provided in your CGT payslip(s) and your form CGT1. If they have any reason to doubt that information they can ask for more information, they can ask you to explain discrepancies, they can ask you to verify the information you have given it by producing transaction records, etc.. Ultimately they can simply issue an assessment for what they think is the correct amount and wait for you to challenge it.

Noctifer

Peregrinus wrote: »

From the information provided in your CGT payslip(s) and your form CGT1. If they have any reason to doubt that information they can ask for more information, they can ask you to explain discrepancies, they can ask you to verify the information you have given it by producing transaction records, etc.. Ultimately they can simply issue an assessment for what they think is the correct amount and wait for you to challenge it.

But without getting data from the exchange they would have no way of knowing that. On top of that I could send some of the money to a bank account outside of Ireland. Would they have insight into a bank account located for example in Germany?

Peregrinus

Noctifer wrote: »

So you are saying I could fake it all and they would have no way of knowing that?

They might, depending on what you have faked. for example if you report disposal of such-and-such a crypto at a value of so much per coin, and they know that others have reported disposal of the same coin on the same day at a very different value, it might occur to them that you have understated the value of the coins. Or, the information you give might not, on audit, match the entries in your bank statements. That kind of thing.

Might you get away with a false return of gains? Yes, you might. Will you get away with it? Very hard to be confident of that. A lot of people who are confident of it end up in very expensive settlements with the Revenue when their confidence turns out to be misplaced.

Peregrinus

Noctifer wrote: »

But without getting data from the exchange they would have no way of knowing that.

If they want data from the exchange, they don't (normally) get it from the exchange. They tell you to get it, and send it to them.

Noctifer wrote: »

On top of that I could send some of the money to a bank account outside of Ireland. Would they have insight into a bank account located for example in Germany?

No, not systematically. (Not yet, at any rate.) But bear in mind that in recent years there have been an awful lot of settlements in relation to non-resident accounts, which the taxpayers (presumably) expected would remain beyond the ken of the Revenue.

The Revenue don't need to know the details of transactions in your non-resident account. The wheels start to fall off this scheme once the revenue become aware that you have a non-resident account which you have not previously mentioned to them, which could happen in a variety of ways.

Noctifer

Peregrinus wrote: »

for example if you report disposal of such-and-such a crypto at a value of so much per coin, and they know that others have reported disposal of the same coin on the same day at a very different value

They can't do that. Depending on the exchange the value of a coin can go up or down 4% within a minute. I once made 4% gain in 30 seconds. Volatility is way too high for them to use that as proper evidence.

You could see the price go up by even more than 4% and then a minute later go back to what it was, all that is required is a massive buy/sell on an exchange with low volume. This isn't stock, this is crypto.

jobless

barneystinson wrote: »

Some clarification of their view by HMRC here:
https://www.accountancylive.com/hmrc-clarifies-tax-treatment-cryptocurrencies

Basically confirming that cryptocurrency is treated no different to any other asset or currency.

Also for those balking at the idea of recognising each trade between cryptocurrencies as a disposal, this is no different than trading a holding of yen, for dollars, for Swiss francs, for Aus dollars... each of those trades into a different currency is a disposal of a distinct asset and acquisition of another distinct asset.

Anyone who believes cryptocurrencies ought to be recognised as currencies, is trying to ride two horses at the same time if they also think trades between different currencies should somehow not be viewed as disposals/acquisitions of different assets.

this kinda goes against the replies others have gotten from the revenue here though?..what do we do?.. im confused

Cryptonovice

Peregrinus wrote: »

You may want to talk to an accountant, to get advice that you can rely on, rather than going on what anonymous unqualified contributors to an internet forum (such as myself) say.

But, to start you off, as I understand it.

1. You generally do not have to report the acquisition of assets, unless the Revenue ask you to complete a long form tax return which includes questions about this. In your circumstance, they are very unlikely to ask you to do this. Don't worry about this unless it happens.

2. It's disposals that you need to worry about.

3. You disposed of Eutherium on two occasions - once in 2017 when you swapped Eutherium for Ripple, and a second time in 2018 when you disposed of Eutherium for Tron and Funfair.

4. Assuming that you bought and then disposed of the Eutherium in a short period, the price/value of the Eutherium probably did not move very much, and therefore you probably did not make any significant gain/loss.

5. You have an annual small gains exemption of EUR 1,270 and by happy coincidence your two disposals fell in different years. So if your gain on the first disposal was less than EUR 1,270, or you had no gain at all, you have no CGT liablity; it's within your small gains exemption for 2017. (Your gain is the difference between what you paid for the asset, and what you disposed of it for. So if you paid EUR 1000 to buy EUTH, and then swapped them for Ripple worth, say, EUR 1050, you have a gain of EUR 50.)

6. And the same goes for the disposal you made in 2018.

7. If you do have a CGT liability, you need to calculate and pay it. Any liablity in respect of the 2017 disposal needs to be paid by 31 January 2018 (so you're already late; get moving!); any liability in respect of the 2018 disposal needs to be paid by 15 December 2018. In each case, you calculate what you think is due and send it off to the Revenue with a form called a "CGT Payslip", which you can download from the Revenue site.

8. Even if you have no CGT liablity, you do have to report disposals and the gains/losses. You do this by completing form CG1 and sending it to the Revenue. For the year 2017, you should submit for CG1 by 31 October 2018. For the year 2018, you need to submit by 31 October 2019.

9. If you stick with your plan, you then have nothing more to do until you dispose of your crypto in 5 years time, at which point you have to caculate your CGT liability, if any, pay it, and report the disposal of the crypto.

Thanks a million!

Peregrinus

Noctifer wrote: »

They can't do that. Depending on the exchange the value of a coin can go up or down 4% within a minute. I once made 4% gain in 30 seconds. Volatility is way too high for them to use that as proper evidence.

You could see the price go up by even more than 4% and then a minute later go back to what it was, all that is required is a massive buy/sell on an exchange with low volume. This isn't stock, this is crypto.

I realise that. That wouldn't stop the Revenue, though, asking to validate the value you have assigned by saying why you valued it at x euro, and producing records or evidence to show that that's a reasonable value.

They wouldn't treat other people's dealings as proof that your value was wrong; just as reason to ask you to demonstrate that your value was correct. Which is fine if you've made a good-faith effort to assign a value that is reasonable for the moment at which you did the transaction, but not so fine if you picked a value largely based on the amount of tax you were prepared to pay.

barneystinson

jobless wrote: »

this kinda goes against the replies others have gotten from the revenue here though?..what do we do?.. im confused

I've only seen one person post up a reply they got from Revenue. I reckon they got a bum steer (entirely possible, as it shouldn't be too much of a stretch to consider that not every employee in a civil service department like Revenue is necessarily a tax expert), and the recipient may be able to avoid interest and penalties as a result.

However, unless you personally have the same thing in writing from them, you're not going to be able to justify your actions/returns based on something that an anonymous person posted in a web forum purporting to be Revenue's opinion.

Fakent.ie

There is still no proof you must pay tax on each transaction. I think there is more proof that you don't pay tax on each transaction.

Someone has surely emailed or rang them and asked these questions other than 1 guy on here

Fakent.ie

jobless wrote: »

this kinda goes against the replies others have gotten from the revenue here though?..what do we do?.. im confused

Contact them yourself don't take anything here for facts. anyone iv conversed with that has spoke to revenue, said the transactions between cryptos isn't true

Fakent.ie

jobless wrote: »

this kinda goes against the replies others have gotten from the revenue here though?..what do we do?.. im confused

Contact them yourself don't take anything here for facts. anyone iv conversed with that has spoke to revenue, said the transactions between cryptos isn't true and that was only 2 people

ZeroThreat

Don't worry, if things keep going the way they are you won't be reporting any gains...

Fakent.ie

ZeroThreat wrote: »

Don't worry, if things keep going the way they are you won't be reporting any gains...

If you bought in before the 1st of december I'd find it hard to believe your at a loss sure who knows

GreeBo

Fakent.ie wrote: »

There is still no proof you must pay tax on each transaction. I think there is more proof that you don't pay tax on each transaction.

This is just wrong.
All of the published documentation from revenue shows that you have to pay on each disposal.

We have 1 unproven email that says otherwise.
There is zero proof that CGT doesnt apply for each disposal, unless you can point some out, please stop posting this.

barneystinson

Fakent.ie wrote: »

Contact them yourself don't take anything here for facts. anyone iv conversed with that has spoke to revenue, said the transactions between cryptos isn't true and that was only 2 people

The facts are that the tax legislation defines what is an asset. And it defines what is a disposal.

Unless or until Revenue issue a public clarification to state that they view ALL cryptocurrencies as a single asset (patently not the case, since what they can be used for and their values against each other differ), then swapping one cryptocurrency for another quite clearly is a disposal for CGT purposes.

The fact that there's a cohort of people who have been entering into transactions blissfully ignorant of the tax consequences, and who now find that the record keeping obligations for all of their transactions is inconvenient, doesn't change the position under tax law.

The levels of wishful thinking in this thread are extraordinary.

Edit: By the way, the people who have been day trading in cryptocurrencies and executing thousands of trades, are probably more likely to fall into income tax treatment than CGT anyway.

ZeroThreat

Fakent.ie wrote: »

If you bought in before the 1st of december I'd find it hard to believe your at a loss sure who knows

lol I'm not, but I've been in since September, the total is still worth about 3 times what I invested, but it's basically halved from the heights of mid Jan. The only shrewd move I made was selling off my ripple at $2.8 (which I bought for 20c). Big mistake not disposing of Substratum while it was $3.

Quite a number of people here who got in later though.

lifeandtimes

barneystinson wrote: »

.

Edit: By the way, the people who have been day trading in cryptocurrencies and executing thousands of trades, are probably more likely to fall into income tax treatment than CGT anyway.

What if you have a full time job but spend that time day trading 1000s of trades?u

barneystinson

lifeandtimes wrote: »

What if you have a full time job but spend that time day trading 1000s of trades?u

Arguably then you are conducting a trade. You'd need to consider if you meet the badges of trade... http://lmgtfy.com/?q=Badges+of+trade

I have a sneaky feeling that lots of cryptocurrency "traders" as opposed to "investors" will emerge from the mist, if the arse falls out of cryptos... since a trade loss can be written off against other income in the same year...

That'd make for a really interesting thread!

.G.

jobless wrote: »

this kinda goes against the replies others have gotten from the revenue here though?..what do we do?.. im confused

You ask them yourself. Their reply to you will steer you right, not what anyone in here says. Even if their answer to you is wrong they've told you its right so thats how you proceed. I'm eagerly awaiting their response to me so I know for sure how to proceed.

lifeandtimes

What if you started buying crypto in January.

Executed maybe 20 transactions while keeping a record of them, increased your portfolio by 20% and now want to leave them as they are for a few years to see if they gain any value.

As you haven't converted it back to fiat, I assume you still fill out a form but don't have to pay CGT yet?

Also what about the next few years, do you still have to fill out form every year even if you haven't made any more transacrions or withdrew your crytpo to fiat?

.G.

You can ask as many questions as you like here, you will only get the definitive answer by putting those questions in an email and sending them to revenue themselves. There's many educated lads here and many educated answers and some not so educated but you will only get the definitive answer to your situation by asking them yourself. A few of us have asked now, only one has heard back so far. When more hear back and put the answers here a clearer picture may emerge but again, the answers we get will only apply to us as we've asked for and received an official response that we can refer back to in the future.

nxbyveromdwjpg

AlmightyCushion wrote: »

The same way people do it for shares/currency/other assets. Take your scenario above and replace BTC with Dollars and ETH with Yen. This person is in the same situation. How do you propose this person pays the taxman before the deadline?

My balance on an exchange is little more than an IOU though. I don't even own the private keys or have control of the private key.

I haven't realised any gain until I've cashed out, or at minimum withdrawn the second asset from the exchange.

What happens if I trade from BTC to ETH, pay the 33% in euro out of other savings, and then the exchange goes bust/gets hacked/gets shut down ?

I have realised no gain and paid 33% tax of an IOU.

barneystinson

Amirah Cold Cafe wrote: »

My balance on an exchange is little more than an IOU though. I don't even own the private keys or have control of the private key.

I haven't realised any gain until I've cashed out, or at minimum withdrawn the second asset from the exchange.

What happens if I trade from BTC to ETH, pay the 33% in euro out of other savings, and then the exchange goes bust/gets hacked/gets shut down ?

I have realised no gain and paid 33% tax of an IOU.

Your money in a bank account or stockbrokers account is little more than an IOU, should you only pay tax on share sales when you have a fat wad of notes in your hand..?

But then again, a €50 note is little more than an IOU... :rolleyes:

AlmightyCushion

Amirah Cold Cafe wrote: »

My balance on an exchange is little more than an IOU though. I don't even own the private keys or have control of the private key.

I haven't realised any gain until I've cashed out, or at minimum withdrawn the second asset from the exchange.

What happens if I trade from BTC to ETH, pay the 33% in euro out of other savings, and then the exchange goes bust/gets hacked/gets shut down ?

I have realised no gain and paid 33% tax of an IOU.

That works the same for share/currencies and other assets. As above replace BTC with USD and ETH with Yen. That's how it works for other assets. You can argue it's unfair but that is how the tax is applied to other assets like shares and currencies.

If you think that isn't fair you should see how badly UCITS ETFs (basically a fund made up of other assets like shares) are treated. In your scenario, at least you would be able to carry over he loss you realised and offset it against gains you make in the future. E.g. if you lost €100,000 on ETH but a few years later you make a gain of €150,000. You can offset that €100,000 meaning you would only owe tax on €50,000.

With UCITS ETFs, you can't do this. Also with UCITS ETFs, you have to do a deemed disposal every 8 years. So with UCITS ETFs even if you plan on never selling them, you still pay CGT on them every 8 years. It's pretty shít but thems the rules. Just because you don't like the rules, or think they're unfair, stupid or shít doesn't mean they don't apply. Maybe Revenue will treat crypto currencies differently to other assets and trading one crypto for another won't be considered a disposal but we don't have anything official to suggest they will. You should treat them like other assets (as in, trading one crypto for another is a disposal and liable for CGT) to avoid a potentially large tax bill with interest and fines down the line. Or you can ask them yourself and see what they say. If they agree with you, great. If they change their mind later (it happens) then at least you can say you were working on information provided by them and that could save you from paying fines and interest.

nxbyveromdwjpg

barneystinson wrote: »

Your money in a bank account or stockbrokers account is little more than an IOU, should you only pay tax on share sales when you have a fat wad of notes in your hand..?

Well, not exactly since banks are stable (for the most part) and stockbrokers are insured and both are regulated.
A cryptocurrency exchange is just a website with a matching engine.

How much would the revenue want if I acquire assets in some game like Farmville and use them to acquire more assets in Farmville? Or work to get assets, in the video game?

AlmightyCushion

Amirah Cold Cafe wrote: »

Well, not exactly since banks are stable (for the most part) and stockbrokers are insured and both are regulated.
A cryptocurrency exchange is just a website with a matching engine.

How much would the revenue want if I acquire assets in some game like Farmville and use them to acquire more assets in Farmville? Or work to get assets, in the video game?

It depends. Are those Farmville assets worth anything? If you can make enough from selling farmville assets to bring you over the €1270 limit for CGT, why shouldn't tax be due on them like it is for every other type of asset?

Why do you think a BTC -> ETH trade should not be considered a disposal when a USD -> Yen trade is considered a disposal?

Peregrinus

Amirah Cold Cafe wrote: »

Well, not exactly since banks are stable (for the most part) and stockbrokers are insured and both are regulated.
A cryptocurrency exchange is just a website with a matching engine.

All you're saying there is that a holding in crypto is a riskier or dodger asset than a bank account, or a regulated broker's account.

This may be true, but so what? There are no exceptions, exemptions or special treatment in the CGT legislation for risky/dodgy assets. The dodginess that you point to is completely irrelevant when considering CGT treatment.

Peregrinus

lifeandtimes wrote: »

What if you started buying crypto in January.

Executed maybe 20 transactions while keeping a record of them, increased your portfolio by 20% and now want to leave them as they are for a few years to see if they gain any value.

As you haven't converted it back to fiat, I assume you still fill out a form but don't have to pay CGT yet?

Also what about the next few years, do you still have to fill out form every year even if you haven't made any more transacrions or withdrew your crytpo to fiat?

If all you have done is to acquire crypto, you have no CGT liablity and no reporting requirement.

But if you have disposed of any crypto (and this includes disposing of one crypto by swapping it for another crypto) then that's a disposal, there's a reporting obligation and, if there is a sufficiently large gain, there is a CGT liablity.

There are those who would like to think that this is not the case; that you can swap crypto all you like, but that you won't be regarded as disposing of any crypto unless and until you sell it for actual fiat money.

Attractive as this would be, it strikes me as very unlikely. There is nothing in the CGT legislation to support this view. If this treatment were to be afforded, I think it could only be by way of extra-statutory concession from the Revenue.

One poster in this thread did say that he had put this question to the Revenue through the online enquiry service, and been told that, yes, Revenue would only expect report and tax payment when crypto was disposed of for cash. This is very encouraging but, frankly, I wouldn't rely on a single anonymous claim on an internet discussion board. If this is relevant to your own tax situation, get your own clarification, in writing, direct from the Revenue. If you don't have that, you should assume that disposing of a holding of crypto is subject to the same reporting requirements and tax liabilities as disposing of any other asset. And, generally, when you swap one asset for another asset, that's a disposal and it comes with reporting requirements and potential tax liablities.

Cryptonovice

Peregrinus wrote: »

If all you have done is to acquire crypto, you have no CGT liablity and no reporting requirement.

But if you have disposed of any crypto (and this includes disposing of one crypto by swapping it for another crypto) then that's a disposal, there's a reporting obligation and, if there is a sufficiently large gain, there is a CGT liablity.

There are those who would like to think that this is not the case; that you can swap crypto all you like, but that you won't be regarded as disposing of any crypto unless and until you sell it for actual fiat money.

Attractive as this would be, it strikes me as very unlikely. There is nothing in the CGT legislation to support this view. If this treatment were to be afforded, I think it could only be by way of extra-statutory concession from the Revenue.

One poster in this thread did say that he had put this question to the Revenue through the online enquiry service, and been told that, yes, Revenue would only expect report and tax payment when crypto was disposed of for cash. This is very encouraging but, frankly, I wouldn't rely on a single anonymous claim on an internet discussion board. If this is relevant to your own tax situation, get your own clarification, in writing, direct from the Revenue. If you don't have that, you should assume that disposing of a holding of crypto is subject to the same reporting requirements and tax liabilities as disposing of any other asset. And, generally, when you swap one asset for another asset, that's a disposal and it comes with reporting requirements and potential tax liablities.

When u say reporting requirements are you referring to the CG1 return form?
When is the 2017 version of the CG1 form made available to us? The 2016 form is all I can find!

Peregrinus

Cryptonovice wrote: »

When u say reporting requirements are you referring to the CG1 return form?

Yes.

Cryptonovice wrote: »

When is the 2017 version of the CG1 form made available to us?

No idea, I'm afraid.

Cryptonovice wrote: »

The 2016 form is all I can find!

Well, you can always print it off, cross out "2016" wherever it appears and insert "2017", and away you go.

Noctifer

barneystinson wrote: »

Arguably then you are conducting a trade. You'd need to consider if you meet the badges of trade... http://lmgtfy.com/?q=Badges+of+trade

I have a sneaky feeling that lots of cryptocurrency "traders" as opposed to "investors" will emerge from the mist, if the arse falls out of cryptos... since a trade loss can be written off against other income in the same year...

That'd make for a really interesting thread!

There is nothing on the revenue site when it comes to those "Badges of Trade". Do you have any actual links? All I get are some UK things which are not relevant.

Peregrinus

Noctifer wrote: »

There is nothing on the revenue site when it comes to those "Badges of Trade". Do you have any actual links? All I get are some UK things which are not relevant.

Actually, they are relevant. The Irish tax imposes income tax on profits from "trade", without explicitly defining "trade". So does the UK legislation. In both cases, therefore, the question of whether a particular activity or pattern of activity does nor does not amount to a "trade" comes up quite a bit, and you look to court cases and commentary to answer the question, since the legislation is silent. Since the question being asked is the same in both jurisdictions, cases and commentary from one jurisdiction, while not binding in the other, are relevant and persuasive. The "badges of trade" is a term used by commentators who are attempting to summarise the, um, collective wisdom that can be gleaned from the relevant cases and rulings about what kind of characteristics an activity has to have in order to be considered a "trade" for income tax purposes.

And this is relevant to CGT because, if an activity is a trade whose profits are subject to income tax, then it's not within the charge to Capital Gains Tax, and vice versa.

Noctifer

So, assuming day trading is a trade an not actual investing, what should I do? Get an accountant?

Cryptonovice

I got a reply from the revenue today exactly 4 weeks later through Paye anytime. They said; “ You do not need to do anything until you sell the coins”. Then you pay on any gains made. We could be over thinking this whole thing.

To me the key word in their response was the word “sell”. I firmly believe the weren’t referring to disposing/swapping crypto for crypto.

Fakent.ie

Cryptonovice wrote: »

I got a reply from the revenue today exactly 4 weeks later through Paye anytime. They said; “ You do not need to do anything until you sell the coins”. Then you pay on any gains made. We could be over thinking this whole thing.

To me the key word in their response was the word “sell”. I firmly believe the weren’t referring to disposing/swapping crypto for crypto.

reply and ask them do they mean return the coins to euro or not. cheers mate

Cryptonovice

I did that straight away!

Fakent.ie

Cryptonovice wrote: »

I did that straight away!

Good man maybe they'll reply in 3 weeks this time

lifeandtimes

Cryptonovice wrote: »

I did that straight away!

Well check back in 4 weeks and see what they say