Hi!
I receive solana staking rewards on my holding portfolio of solana in binance - I need to know how am i supposed to calculate the tax liability for these staking rewards? Let me lay out an example:
I receive solana staking rewards into my binance wallet everyday - I wish to use this as passive income, so I hold these daily distributed tokens and every 1st of the month I sell them at market price into GBP. I then transfer to my UK bank account.
My question is:
- Do I consider the amount of GBP I send to my bank as the taxable amount calculated as income tax? Ideally I would send HMRC a monthly tax payment the same day I receive the GBP in order to stay on top of my taxes.
Or 2: Is the taxable amount a calculation of the cost basis on receipt of the solana tokens? If so how do i calculate this each month? How do i know what amount I will need to pay? I dont want to under pay and then in april have a much bigger bill!
Also:
This statement from the website is confusing… Can someone please clarify… If I never sell my holding portfolio, will I never have to pay a capital gains tax as its considered unrealised profit?
if this is indeed the case, if my capital gains tax rate would be 20% if i did realise profit by trading am i right in thinking that if i sold my holding portfolio for USDT, if I was unable to buy back the original assets with less than a minimum of a 20% price reduction, then theoretically it would be pointless making changes to the portfolio trying to average down as any tax liability would be higher than any potential lower price that cant beat the 20% tax liability…
I think this statement below confused me and needs revising - what are long term gains vs short term gains??
Hold for a year
This tax avoidance strategy requires you to hold you crypto investment for at least one year before selling. Do this and your crypto gains will qualify for a long-term capital gains rate. In the [UK, taxpayers can avoid crypto tax with a maximum rate of just 20% on long-term gains versus a maximum rate of 37% on short-term gains.