Swap wrapped tokens (BTC <-> WBTC, ETH <-> WETH, etc), taxable in UK?

Hi everyone,
I know that Koinly shows transaction that transfers a token to its wrapped version (BTC → WBT, EHT → crvEth, etc) as a taxable event.

The question is, are these indeed taxable events in UK or it is just limitation of koinly?

Can’t say for certain about the UK but it is in Canada. It’s kind of a blessing in a way. I can wrap some of my ETH and when I decide to sell, I can choose which version to sell based on the amount of gains I’d receive on that version.

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Would love to get some answer from someone with UK tax experience or from Koinly staff as koinly still count it as a disposal even after marking it as “swap” event.

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So, I am no accountant and am having the same issue. I think Koinly is broken here, currently even if I mark as a SWAP a gain is being generated.

However from what I have read this is simply a ticker swap, the assets are essentially the same and there is no realized gain. As the previous poster pointed out if this was so… it would create a gaping hole in the bed-and-breakfast rules.

So come on @koinly - you promised this would be fixed over a year ago when I posted about this in the forum…

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Like you, George, I am no accountant. But WBTC and BTC are, in fact, two different tokens even though their value is ‘essentially the same’. One is an ERC20 token and, well, the other isn’t. A similar situation is the relationship between stETH and ETH. When I swap ETH for stETH I am, in effect, trading one coin for another - it’s not just a ticker change. There is a realized gain (so be careful of the CGT implications of staking in this way) but, on the plus side, when stETH value goes up the gain is being based on the price on the date you traded your ETH for stETH (or BTC for WBTC for that matter).

In the spirit of openness and continual learning, I am happy to be corrected on this.

the challenge is, there is valid arguments on both sides. hence something more than our opinion is needed. i.e some official guidance or official answer from Koinly on why they treat as a taxable event. This will at least help us know whether it is currently calculated correctly on Koinly or there is just a bug in the system.

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