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

CryptoMad

Andeargdoom wrote: »

Thanks,
Appreciate the help

Did you put 33% in both the long and short term settings?

.G.

My response from revenue is in and is the same as every one else's bar the first person who asked. Although its worded quite generically and he totally avoided some of the specifics I asked.

Dear Sir,

Revenue looks at investments in cryptocurrency in the same manner as an investment in any other currency, stock, or share. If you are making a profit through the selling, gifting, or exchanging of your cryptocurrency, you need to declare it to Revenue for capital gains tax (CGT). You will need to file a CG1 Return which is due the year following your disposal. If you make a disposal between 1 January and 30 November then you must pay CGT by 15 December of the same year. If you make a disposal between 1 - 31 December, you must pay CGT by 31 January of the following year.

Seurat

CryptoMad wrote: »

Andeargdoom wrote: »

Thanks,
Appreciate the help

Did you put 33% in both the long and short term settings?

Havent ran a report yet, but will leave them two spots empty I am guessing..as neither of them apply. The overall profit is taxed at 33%

.G.

I often get different results each time i generate a report for the same transactions and I nearly always get different results when I put 33% in both boxes as opposed to when I put 33% in the short term box and I tick that long term doesn't apply. Which is all very strange cos they all mean the same thing.

thegolfer

superg wrote: »

My response from revenue is in and is the same as every one else's bar the first person who asked. Although its worded quite generically and he totally avoided some of the specifics I asked.

What were your specific questions that were avoided?

Revenue may view these as being generally available on their web that they are in essence answered already, with a bit of looking mind you.

Peregrinus

superg wrote: »

I often get different results each time i generate a report for the same transactions and I nearly always get different results when I put 33% in both boxes as opposed to when I put 33% in the short term box and I tick that long term doesn't apply. Which is all very strange cos they all mean the same thing.

Not necessarily. The system may assume that "long term does not apply" means "no tax on long term gains".

Intuitively, I would think that putting 33% in both boxes is the correct approach. You can have gains on assets held for a short time or gains on assets held for a long time but, either way, the tax rate will be 33%. Therefore, it's 33% on both short- and long-term gains.

But I say this without having actually looked at the system. So don't treat it as gospel.

.G.

Peregrinus wrote: »

Not necessarily. The system may assume that "long term does not apply" means "no tax on long term gains".

Intuitively, I would think that putting 33% in both boxes is the correct approach. You can have gains on assets held for a short time or gains on assets held for a long time but, either way, the tax rate will be 33%. Therefore, it's 33% on both short- and long-term gains.

But I say this without having actually looked at the system. So don't treat it as gospel.

Yeah thats what I'm sticking with, 33% in both boxes.

A final question from me and then its off to pay and file!

I use a website to keep track of the various coins and charts I'm interested in and I use it to place my buys and sells. Can i deduct the cost of my subscription to this website?

Revenue webpage on CGT says this:-

When calculating your CGT liability, you may deduct the following items:...

costs (for example, fees paid by you to a solicitor or auctioneer) when you acquired and disposed of the asset.

Would my subscription fees be applicable under that?

Cryptonovice

In the first part of the return form which option do people select for cryptocurrencies? Other assets or shares/securities quoted (is what an accountant selected on mine)

Seurat

superg wrote: »

Peregrinus wrote: »

Not necessarily. The system may assume that "long term does not apply" means "no tax on long term gains".

Intuitively, I would think that putting 33% in both boxes is the correct approach. You can have gains on assets held for a short time or gains on assets held for a long time but, either way, the tax rate will be 33%. Therefore, it's 33% on both short- and long-term gains.

But I say this without having actually looked at the system. So don't treat it as gospel.

Yeah thats what I'm sticking with, 33% in both boxes.

A final question from me and then its off to pay and file!

I use a website to keep track of the various coins and charts I'm interested in and I use it to place my buys and sells. Can i deduct the cost of my subscription to this website?

Revenue webpage on CGT says this:-

When calculating your CGT liability, you may deduct the following items:...

costs (for example, fees paid by you to a solicitor or auctioneer) when you acquired and disposed of the asset.

Would my subscription fees be applicable under that?

I would have thought that subscritpion to sites like coinigy could apply. I was told in a previous answer in this thread that even cointracking.info waa not applicable (even tho it is accountancy) so I am guessin not unless it is your sole source of income

Peregrinus

superg wrote: »

Yeah thats what I'm sticking with, 33% in both boxes.

A final question from me and then its off to pay and file!

I use a website to keep track of the various coins and charts I'm interested in and I use it to place my buys and sells. Can i deduct the cost of my subscription to this website?

Revenue webpage on CGT says this:-



Would my subscription fees be applicable under that?

I think not.

If you were carrying on a trade of dealing in cryptocurrencies, the entire costs of the trade would be deductible, and that would include the cost of subscribing to your trading platform. But you'd income tax, not CGT, on the profits of the trade; you don't want that.

Under the CGT regime, it's only the costs of the specific acquisitions and disposals which are deductible, not the costs of settting yourself up so that you can make acquisitions and disposals in the first place. So the fee or commission paid to acquire or dispose of a particular holding is deductible (but both acquistion and disposal cost are only deductible when that particular holding is actually disposed of) but the prior costs of getting access to the trading platform are not.

.G.

thegolfer wrote: »

What were your specific questions that were avoided?

Revenue may view these as being generally available on their web that they are in essence answered already, with a bit of looking mind you.

I had asked was there a specific crossover point at which my activity would become trading rather than investing and therefore liable to income tax not CGT. He didn't answer. I was only trading for 3 months last year and had 145 trades in that period. To me, I think thats income tax territory which obviously wont be good for me tax wise. That said if it is income tax, is everything still the same or do I pay the tax when I sell the coins into FIAT cos I rarely do that. All the crypto tax websites use CGT. Income tax will be a whole new headache for me to work out what I owe.

Anyone explain aggregate consideration and what I put down for it on the CGT form?

Peregrinus

superg wrote: »

I had asked was there a specific crossover point at which my activity would become trading rather than investing and therefore liable to income tax not CGT. He didn't answer. I was only trading for 3 months last year and had 145 trades in that period. To me, I think thats income tax territory which obviously wont be good for me tax wise. That said if it is income tax, is everything still the same or do I pay the tax when I sell the coins into FIAT cos I rarely do that. All the crypto tax websites use CGT. Income tax will be a whole new headache for me to work out what I owe.

There is no specific crossover point. There's a number of different factors that have to be balanced in making a decision as to whether a particular pattern of activity is a trade or not. There are lots of knotty borderline cases.

This used to matter a lot more in the late middle ages when there was no CGT. The consequence of your activities not being regarded as a trade (or as "an adventure in the nature of a trade") was that whatever return you earned from those activities escaped tax completely. Now, it just means it's subject to CGT rather than income tax, which still makes a difference, but it's not the huge deal that it used to be.

Generally, in borderline cases, if you assess yourself on the basis that your activities are not a trade and the return from them is subject to CGT, the revenue will accept that. If you really feel that would be dodgy, or if you have made thumping losses and want to be treated as carrying on a trade, you're definitely in territory where you need to think about paying for actual tax advice from an actual tax adviser.

.G.

Peregrinus wrote: »

There is no specific crossover point. There's a number of different factors that have to be balanced in making a decision as to whether a particular pattern of activity is a trade or not. There are lots of knotty borderline cases.

This used to matter a lot more in the late middle ages when there was no CGT. The consequence of your activities not being regarded as a trade (or as "an adventure in the nature of a trade") was that whatever return you earned from those activities escaped tax completely. Now, it just means it's subject to CGT rather than income tax, which still makes a difference, but it's not the huge deal that it used to be.

Generally, in borderline cases, if you assess yourself on the basis that your activities are not a trade and the return from them is subject to CGT, the revenue will accept that. If you really feel that would be dodgy, or if you have made thumping losses and want to be treated as carrying on a trade, you're definitely in territory where you need to think about paying for actual tax advice from an actual tax adviser.

First red flag was the actual form 11. There's two boxes side by side to write numbers in telling them how many disposals you made. Obviously my 145 doesn't fit in that so that kind of made me wonder. I'm defo going to get some professional advice before I do anything else.

Would any accountant do or would it have to be a specialist?

Elessar

Reading back over the thread and I'm somewhat still unsure:

Crypto-crypto trades are taxable right? So if you did a lot of trades in 2017, but never converted to fiat, and you still hold the coins, do you still need to pay the CGT?

Or is it only due when you finally convert to euro?

If payment is due and someone did some trades in 2017 but forgot to file and return, now that the payment deadline has passed how do you pay and do you need to calculate interest and surcharges?

Peregrinus

Elessar wrote: »

Reading back over the thread and I'm somewhat still unsure:

Crypto-crypto trades are taxable right? So if you did a lot of trades in 2017, but never converted to fiat, and you still hold the coins, do you still need to pay the CGT?
When you say "you still hold the coins", of course you don't hold all the coins; you only hold the coins that you last acquired. You need to pay any CGT arising on all the disposals of coins that you have done.

So if you exchange bitcoin A for bitcoin B, you have disposed of bitcoin A. If a gain arose on disposal - i.e. if bicoin A was worth more when you disposed of it than it was when you acquired it - you need to account for CGT on that.

If bitcoin B has risen in value since you acquired it, you don't need to account for CGT on that. There'll be no CGT due in respect of your holding of bitcoin B until you dispose of it.

Elessar wrote: »

If payment is due and someone did some trades in 2017 but forgot to file and return, now that the payment deadline has passed how do you pay and do you need to calculate interest and surcharges?

I think you just calculate and pay the tax. They'll calculate and demand any interest or penalties. If your tax liability was modest, you might be lucky and they might reduce, or not claim, interest or penalties. If, on the other hand, your tax liability was large, it might be worth your while to involve an accountant or tax adviser, to advise you on a strategy for mitigating interest and penalties.

smacl

Peregrinus wrote: »

Crypto-crypto trades are taxable right? So if you did a lot of trades in 2017, but never converted to fiat, and you still hold the coins, do you still need to pay the CGT?
When you say "you still hold the coins", of course you don't hold all the coins; you only hold the coins that you last acquired. You need to pay any CGT arising on all the disposals of coins that you have done.

So if you exchange bitcoin A for bitcoin B, you have disposed of bitcoin A. If a gain arose on disposal - i.e. if bicoin A was worth more when you disposed of it than it was when you acquired it - you need to account for CGT on that.

If bitcoin B has risen in value since you acquired it, you don't need to account for CGT on that. There'll be no CGT due in respect of your holding of bitcoin B until you dispose of it.

Am I missing something or is this unnecessarily over-complicated? If, in a given tax period, you are allowed offset losses made from one coin against profits from another, as discussed here and here, surely the profit which is liable to CGT is the difference in value of the crypto portfolio this year and last year, less any allowable expenses and corrected for any additional funds added or withdrawn.

If you attempt to crystallise the profit at time of transaction on a crypto exchange in fiat terms, you're left with a big fat zero. Profit only occurs as a function of appreciation (or more likely depreciation these days), and thus occurs at the time you decide to compare the current value of an asset to its previous value. I would have thought that time was when you're filling in your tax return.

kaymin

smacl wrote: »

Am I missing something or is this unnecessarily over-complicated? If, in a given tax period, you are allowed offset losses made from one coin against profits from another, as discussed here and here, surely the profit which is liable to CGT is the difference in value of the crypto portfolio this year and last year, less any allowable expenses and corrected for any additional funds added or withdrawn.

Gains and losses need to be realised in order for them to be recognised under the tax rules. Unrealised gains are not taxable and unrealised losses are not allowable losses.

smacl

kaymin wrote: »

Gains and losses need to be realised in order for them to be recognised under the tax rules. Unrealised gains are not taxable and unrealised losses are not allowable losses.

So for any coin that has unrealised gains or losses that you want to include for CGT purposes, you convert to BTC and immediately back again the day you fill out the form. This leaves you back in the position where your profit is the current value of your portfolio minus the previous value less allowable costs. Simples.

kaymin

smacl wrote: »

So for any coin that has unrealised gains or losses that you want to include for CGT purposes, you convert to BTC and immediately back again the day you fill out the form. This leaves you back in the position where your profit is the current value of your portfolio minus the previous value less allowable costs. Simples.

Not quite, bed and breakfast anti avoidance rules would apply in that instance.

https://www.paylesstax.ie/sale-of-shares-tax-saving-tips/#.Wsm7e6Ao80M

smacl

kaymin wrote: »

Not quite, bed and breakfast anti avoidance rules would apply in that instance.

https://www.paylesstax.ie/sale-of-shares-tax-saving-tips/#.Wsm7e6Ao80M

Brilliant, so you swap coins that you want to account for four weeks prior to completing your return and swap back afterwards. A totally pointless PITA but if that's what you feel is necessary to please the revenue, so be it. That said, with multiple exchanges and wallets, I doubt many people would bother.

I would imagine that until the revenue come up with definitive guide lines for dealing with crypto, they are highly unlikely to pursue those self declaring who make a reasonable return unless the amounts involved are very substantial. The problem with accounting for coin to coin exchanges that happen in the middle of an accounting year is to know how to put a value on the profit. e.g. you could look at the euro value of the currency being sold at time of purchase versus its value at time of disposal and calculate profit or loss on that basis. So say I bought 10BTC at the start of last year for €20k, they rise in value to €100k at which point I swap to ETH. If we allow coin to coin transactions as realised profits, I've just realised €80k of profit (yay!). I hold on to my ETH and they drop back down to €10k value (boo!) but I don't sell. By your reckoning my CGT liability is 30% of €80k = €24k. So basically, I've invested €10k in crypto, I still have €10k value of crypto, and I'm due to pay €24k on my realised profits? If you believe that anyone in their right mind is going to acknowledge that one, you're in cloud cuckoo land. It is worth remembering that the revenue are relying on good will to see any crytpo exchange transactions, as opposed to money coming in and out of bank accounts, and that many coins specialise in providing anonymity. I would imagine most honest people will pay CGT on profits that they've actually realised.

kaymin

smacl wrote: »

Brilliant, so you swap coins that you want to account for four weeks prior to completing your return and swap back afterwards. A totally pointless PITA but if that's what you feel is necessary to please the revenue, so be it. That said, with multiple exchanges and wallets, I doubt many people would bother.

I would imagine that until the revenue come up with definitive guide lines for dealing with crypto, they are highly unlikely to pursue those self declaring who make a reasonable return unless the amounts involved are very substantial. The problem with accounting for coin to coin exchanges that happen in the middle of an accounting year is to know how to put a value on the profit. e.g. you could look at the euro value of the currency being sold at time of purchase versus its value at time of disposal and calculate profit or loss on that basis. So say I bought 10BTC at the start of last year for €20k, they rise in value to €100k at which point I swap to ETH. If we allow coin to coin transactions as realised profits, I've just realised €80k of profit (yay!). I hold on to my ETH and they drop back down to €10k value (boo!) but I don't sell. By your reckoning my CGT liability is 30% of €80k = €24k. So basically, I've invested €10k in crypto, I still have €10k value of crypto, and I'm due to pay €24k on my realised profits? If you believe that anyone in their right mind is going to acknowledge that one, you're in cloud cuckoo land. It is worth remembering that the revenue are relying on good will to see any crytpo exchange transactions, as opposed to money coming in and out of bank accounts, and that many coins specialise in providing anonymity. I would imagine most honest people will pay CGT on profits that they've actually realised.

Yes, that's all correct with the exception that the CGT rate is 33%. It's really no different to share trading so I wouldn't hold my breath for specific guidance from Revenue on cryptos. Besides the PAYE system all tax is subject to self-assessment. You can ignore the rules if you choose but Revenue frequently embark on themed audits.

smacl

kaymin wrote: »

Yes, that's all correct with the exception that the CGT rate is 33%. It's really no different to share trading so I wouldn't hold my breath for specific guidance from Revenue on cryptos. Besides the PAYE system all tax is subject to self-assessment. You can ignore the rules if you choose but Revenue frequently embark on themed audits.

Been in business for myself and employing others for the last 29 years so well used to dealing with the revenue. My experience has been that if you pay what you believe you owe promptly, there's rarely going to be any issues. Two audits in that time frame, no issues on either. Their website is dodgy and response times lousy, but no different to any other government department there.

Peregrinus

smacl wrote: »

So for any coin that has unrealised gains or losses that you want to include for CGT purposes, you convert to BTC and immediately back again the day you fill out the form. This leaves you back in the position where your profit is the current value of your portfolio minus the previous value less allowable costs. Simples.

It's not a question of whether you "want to include" unrealised gains and losses for CGT purposes; you can't include them; they are not chargeable.

If you could choose whether to include them or not, naturally everybody with net unrealised losses would choose to include them, while everybody with net unrealised gains would choose not to.

smacl

Peregrinus wrote: »

It's not a question of whether you "want to include" unrealised gains and losses for CGT purposes; you can't include them; they are not chargeable.

If you could choose whether to include them or not, naturally everybody with net unrealised losses would choose to include them, while everybody with net unrealised gains would choose not to.

I would have thought this comes down to whether revenue specifically required you include the theoretical change in value of of your coin value due to coin to coin transactions as realised gains or losses at time of transaction or not. Worth remembering that one such type of transaction is arbitrage, where you make your profit by transferring a coin between exchanges at slightly different rates. I'd be interested in hearing your thoughts as to what asset gets realised there if any? e.g. If I use 1 ETH on Kraken to buy 1.05 ETH on Kucoin what asset have I realised at what value?

Peregrinus

smacl wrote: »

I would have thought this comes down to whether revenue specifically required you include the theoretical change in value of of your coin value due to coin to coin transactions as realised gains or losses at time of transaction or not.

Other way round, I think. Unless and until the Revenue indicate that cryptocurrencies get treated differently from other assets, they get treated the same as other assets. Which means that a disposal of cryptocurrency is a chargeable event, and this doesn't generally depend on what you are disposing of it for, while an appreciation (or diminution) in value of cryptocurrnency is not.

smacl wrote: »

Worth remembering that one such type of transaction is arbitrage, where you make your profit by transferring a coin between exchanges at slightly different rates. I'd be interested in hearing your thoughts as to what asset gets realised there if any? e.g. If I use 1 ETH on Kraken to buy 1.05 ETH on Kucoin what asset have I realised at what value?

Call me slow-witted, but why would the transaction counterparty on Kucoin give you 1.05 ETH in exchange for 1.00 ETH?

Are there, in fact, two transactions here?

smacl

Peregrinus wrote: »

Call me slow-witted, but why would the transaction counterparty on Kucoin give you 1.05 ETH in exchange for 1.00 ETH?

Are there, in fact, two transactions here?

Sorry, yes, my bad. The exchange rate for a given pair such as ETH/BTC will be different on different exchanges, so I might sell 1 ETH for 0.1 BTC on Kraken, transfer the 0.1 BTC to Kucoin, and use it to buy 1.01 ETH there.

Peregrinus

smacl wrote: »

Sorry, yes, my bad. The exchange rate for a given pair such as ETH/BTC will be different on different exchanges, so I might sell 1 ETH for 0.1 BTC on Kraken, transfer the 0.1 BTC to Kucoin, and use it to buy 1.01 ETH there.

This is no different from other forms of arbitrage, then, in which I rely on market imperfections to sell high in one market and buy cheaply in another.

It doesn't raise any very challenging CGT issues. The first transaction is a disposal of 1 ETH; you need to calculate your gain or loss (expressed in euros). The second transaction is a disposal of 0.1 BTC; again, you need to calculate your gain or loss expressed in euros. Since you have held the 0.1 BTC for a very short period, and since you will use the same valuation basis for calculating gains and losses in both transactions, the gain or loss on the second transaction is likely to be negligible.

Obviously, if you are doing these transactions with sufficient method, frequency, system, etc, you can make the case that you are not investing in cryptocurrencies, but rather trading in them, in which case calculating the profits of the trade is done differently and the Revenue may well accept a calculation which is basically the difference between the value of your portfolion on 1 January, and on the 1 January of the following year. (It's a bit more complex, esp if you have had any disposals which you did not reinvest in crypto, or if you have injected extra funds duriing the year, but that's the basis of it.) But you'll also be paying tax on your profits at marginal income tax rates, not CGT rates, so if you are dealing profitably this will not look like a good idea to you (and if you are dealing at a loss it will not look like a good idea to the Revenue).

Again, there are some knotty issues here, but none of them depend on the fact that what you are dealing in is crypto rather than, say, antique furniture.

smacl

Peregrinus wrote: »

This is no different from other forms of arbitrage, then, in which I rely on market imperfections to sell high in one market and buy cheaply in another.

It doesn't raise any very challenging CGT issues. The first transaction is a disposal of 1 ETH; you need to calculate your gain or loss (expressed in euros). The second transaction is a disposal of 0.1 BTC; again, you need to calculate your gain or loss expressed in euros. Since you have held the 0.1 BTC for a very short period, and since you will use the same valuation basis for calculating gains and losses in both transactions, the gain or loss on the second transaction is likely to be negligible.

Very much my take on it. So you can effectively use an arbitrage transaction directly after any other large transaction to ensure that both sides of the previous transaction are realised, once all of this happens within four weeks of your return date, such that you don't fall foul of B&B clauses. i.e. as a mechanism to keep all assets in your portfolio fully realised at all times.

Obviously, if you are doing these transactions with sufficient method, frequency, system, etc, you can make the case that you are not investing in cryptocurrencies, but rather trading in them, in which case calculating the profits of the trade is done differently and the Revenue may well accept a calculation which is basically the difference between the value of your portfolion on 1 January, and on the 1 January of the following year. (It's a bit more complex, esp if you have had any disposals which you did not reinvest in crypto, or if you have injected extra funds duriing the year, but that's the basis of it.) But you'll also be paying tax on your profits at marginal income tax rates, not CGT rates, so if you are dealing profitably this will not look like a good idea to you (and if you are dealing at a loss it will not look like a good idea to the Revenue).

Certainly how I'd go about it if I was making a living trading crypto, as opposed to making discrete investments.

Again, there are some knotty issues here, but none of them depend on the fact that what you are dealing in is crypto rather than, say, antique furniture.

Yes and no. If we're talking about relatively few, large, manual, discrete transactions, the situation would be comparable. If we're talking about much larger numbers of fully automated, very small transactions, then no. The latter case would be what happens using bots, which to my mind is likely to become the primary trading mechanism going forward. For this case, I'd imagine revenue would want to deal with consolidated figures across a portfolio.

Peregrinus

smacl wrote: »

Certainly how I'd go about it if I was making a living trading crypto, as opposed to making discrete investments.

As regards whether you are trading or investing, it doesn't matter whether you are making a living at it or not. In fact, people mostly claim to be trading when, far from making a living from their activities, they are making thumping losses. They argue that they are trading so that for income tax purposes they can set their losses off against earning from the "day job".

smacl wrote: »

Yes and no. If we're talking about relatively few, large, manual, discrete transactions, the situation would be comparable. If we're talking about much larger numbers of fully automated, very small transactions, then no. The latter case would be what happens using bots, which to my mind is likely to become the primary trading mechanism going forward. For this case, I'd imagine revenue would want to deal with consolidated figures across a portfolio.

Well, on a nitpick, if arbitrage employing bots becomes feasible, arbitrage opportunties are likely to disappear, aren't they? Or, at least, the margins that you can make through arbitrage will become so tiny that only the very biggest players will be able to make useful amounts of money through arbitrage.

As for the revenue's attitude towards transaction-by-transaction accounting versus consolidated portfolio figures, one of the beauties (from their point of view) of a self-assessment system is that they don't do the donkey work of calculating liability; the taxpayers do the bulk of that.

Nor do the Revenue think that they are imposi9ng a great burden on you. If you undertake two transactions in order to profit from arbitrage, for your own purposes you are already calculating what the two transactions cost and what profit or gain they yield; if you weren't doing that you wouldn't be able to spot the arbitrage opportunity. So they are not asking you to do sums that you wouldn't be doing anyway.

I could see a situation where the Revenue are happy for you to aggregate two transactions where you buy one crypto purely because it's the only crypto which which you can buy a second crypto, which is the one you really want. But where you undertake two transactions with a view to making a profit or gain through arbitrage, that is precisely the situation in which they will not want the transactions aggregated, because they want the arbitrate profit or gain identified and taxed.

smacl

Peregrinus wrote: »

Well, on a nitpick, if arbitrage employing bots becomes feasible, arbitrage opportunties are likely to disappear, aren't they? Or, at least, the margins that you can make through arbitrage will become so tiny that only the very biggest players will be able to make useful amounts of money through arbitrage.

Plenty of arbitrage bots out there all ready and I agree that bots will lead to tighter margins in many circumstances though not all. As for who makes money on it, I would hazard a guess it will be the bots with the best predictive algorithms that will do well, and that this will change dynamically with the market. This certainly doesn't preclude the small player.

Peregrinus

smacl wrote: »

Plenty of arbitrage bots out there all ready and I agree that bots will lead to tighter margins in many circumstances though not all. As for who makes money on it, I would hazard a guess it will be the bots with the best predictive algorithms that will do well, and that this will change dynamically with the market. This certainly doesn't preclude the small player.

I think what it does, though, is mean that the aribitrage opportunities are fleeting.

smacl

Peregrinus wrote: »

I think what it does, though, is mean that the aribitrage opportunities are fleeting.

Directly, yes, using a predictive techniques not so much. By directly I'm talking about a simple comparison of a difference in a given pair at a given point in time across exchanges. This favours the scale advantage of big players. However, for any given pair on any exchange that has an API, you could also look at volumes of uncompleted trades and speculate as to their upcoming position. You can make a trade within the exchange on this basis, or across exchanges where the relative value gradient over time between pairs is pronounced. By speculate I mean guess or predict by one of a wider variety of possible mechanisms. Deep learning seems like a mechanism with good potential here and would probably be my first port of call were I to get into writing bots. I'd expect this has already been widely done, original sin being rare enough even in crypto, but how well and how much room for improvement there is out there is anyone's guess.

splashuum

Hey lads,

Tricky question here I think. I won a sum of money on a gambling site that takes bitcoin deposits/withdrawals. I have since withdrew the money via btc into to my btc wallet. My initial deposit to the site was also in btc.
If I was to withdraw all of this money into my bank would I have to pay CGT?
(I have proof from the gambling site that my btc withdrawal exceeds deposit if revenue ask)

Any sort of opinions/knowledge welcome

.G.

Elessar wrote: »

Reading back over the thread and I'm somewhat still unsure:

Crypto-crypto trades are taxable right? So if you did a lot of trades in 2017, but never converted to fiat, and you still hold the coins, do you still need to pay the CGT?

Or is it only due when you finally convert to euro?

If payment is due and someone did some trades in 2017 but forgot to file and return, now that the payment deadline has passed how do you pay and do you need to calculate interest and surcharges?

I've done this too in regards to 2017. I just calculated my tax and paid it via revenue's online service, 3 months after it was due. I've also sent off my CG1 form and as its before 31st October 2018 revenue will calculate what I owe and tell me. Then I can pay any interest and charges. Accountant I spoke to said they'll probably let it slide as it was a small amount and its my first time paying. He said make sure to pay on time and you'll generally not have any issue if you're late on occasion.

And yes crypto to crypto are chargeable even if you don't convert to euro. When I asked them they said its treated like any other share. I didn't convert any to euro either.

xabi

Let’s say I spend 1000 euro to buy ETH, where is the gain/loss? Surely there isn’t any as I bought at the value that day. Now if the ETH rises then obviously there’s a gain then and it could fluctuate up and down, when do I work out my profit for CGT purposes?

AlmightyCushion

xabi wrote: »

Let’s say I spend 1000 euro to buy ETH, where is the gain/loss? Surely there isn’t any as I bought at the value that day. Now if the ETH rises then obviously there’s a gain then and it could fluctuate up and down, when do I work out my profit for CGT purposes?

You pay CGT when you dispose of the asset i.e. when you sell or trade your ETH.

xabi

AlmightyCushion wrote: »

You pay CGT when you dispose of the asset i.e. when you sell or trade your ETH.

So if I use the ETH to buy another currency straight away there won’t be a gain initially. Or is it when I convert back to EUR?

grindle

xabi wrote: »

So if I use the ETH to buy another currency straight away there won’t be a gain initially. Or is it when I convert back to EUR?

If you buy €10k of ETH, the price trebles and you spend that ETH on WhateverToken, you owe 33% CGT on the €20k profit you've just realised.

xabi

grindle wrote: »

If you buy €10k of ETH, the price trebles and you spend that ETH on WhateverToken, you owe 33% CGT on the €20k profit you've just realised.

What I did was, buy 4K worth of ETH on Coinbase, Transfered all the ETH to Binance and bought ZIL. This was 2 months ago, the ZIL has nearly trebled in price at a this stage, so when do I owe the CGT? 31/12/18? When is the profit calculated for CGT? That’s the part I don’t understand.

grindle

xabi wrote: »

What I did was, buy 4K worth of ETH on Coinbase, Transfered all the ETH to Binance and bought ZIL. This was 2 months ago, the ZIL has nearly trebled in price at a this stage, so when do I owe the CGT? 31/12/18? When is the profit calculated for CGT? That’s the part I don’t understand.

You don't owe anything on the ZIL until you realise the gain.

xabi

That’s what I thought, but, I’ve read that you pay CGT on every transaction.

grindle

xabi wrote: »

That’s what I thought, but, I’ve read that you pay CGT on every transaction.

You do. Or you can realise fiat losses while still growing the crypto-stack. I'm not sure how that's at odds with what I've said. Your ZIL may have trebled in price but unless you've sold it for a profit there's zero gain to speak of. It could be half that price tomorrow.

Peregrinus

xabi wrote: »

What I did was, buy 4K worth of ETH on Coinbase, Transfered all the ETH to Binance and bought ZIL. This was 2 months ago, the ZIL has nearly trebled in price at a this stage, so when do I owe the CGT? 31/12/18? When is the profit calculated for CGT? That’s the part I don’t understand.

grindle wrote: »

You don't owe anything on the ZIL until you realise the gain.

You don't owe anything on the ZIL until you dispose of the ZIL, but you may owe something on the ETH because you have disposed of it. Did ETH rise in value between the time you acquired your ETH on Coinbase and sold them on Binance?

GreeBo

xabi wrote: »

That’s what I thought, but, I’ve read that you pay CGT on every transaction.

You pay on the selling txn, not the buying...if that helps?

xabi

Peregrinus wrote: »

You don't owe anything on the ZIL until you dispose of the ZIL, but you may owe something on the ETH because you have disposed of it. Did ETH rise in value between the time you acquired your ETH on Coinbase and sold them on Binance?

No idea if the ETH changed as it was all completed in a few minutes, would the charges for the transfer offset any small gains?

Peregrinus

xabi wrote: »

No idea if the ETH changed as it was all completed in a few minutes, would the charges for the transfer offset any small gains?

if the gains were small enough, yes. But one of the notable features of cryptocurrencies is that tehy can be extremely volatile, so the possibility of large gains in a short period is there.

.G.

https://cointelegraph.com/news/france-crypto-is-now-moveable-property-tax-down-from-45-to-19-percent/amp?__twitter_impression=true

Interesting approach from France.

ZeroThreat

superg wrote: »

https://cointelegraph.com/news/france-crypto-is-now-moveable-property-tax-down-from-45-to-19-percent/amp?__twitter_impression=true

Interesting approach from France.

Knowing the authorities here, they're more likely to seek higher tax rates specific to crypto.

relax carry on

Revenue have issued an update to the tax and duty manual regarding cryptocurrency.

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-01-03.pdf

thegolfer

relax carry on wrote: »

Revenue have issued an update to the tax and duty manual regarding cryptocurrency.

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-02/02-01-03.pdf

Nothing new there....

Queue the questions on what if.....