Hey all,
whilst I wait up to 72 hours for Coinbase to reset my 2-factor authentication so I could add my Coinbase data to Koinly, I thought I share my question here.
I started buying Cryptos back in the summer of 2017 my original investment in crypto over the years has been £8,295.31 and back in June of this year, I sold my cryptos on Coinbase for £15,757.89.
The reason being was that Bitstamp introduced free trading in GBP and I thought I utilize this to make some quick flips without paying fees. So after receiving the £15,757.89 into my Uk bank account I immediately transferred the total sum to my Bitstamp account on the same day.
My flip plan was selling crypto at peak and then wait for it to drop (Crash) and buyback original holdings and take the difference has PROFIT). I completely forgot about taxes, ignorant of me! till I read Coinbase reports to the HMRC.
My thinking was I sold my Crypto to move onto a different exchange, which I transferred the funds to Bitstamp on the same day, so I do not have to pay tax as I have not taken any profit but just moved it elsewhere, once again forgive my ignorance.
I called up the HMRC and managed to make the bellow calculations with their “Tax Technician”.
Original Investment in crypto £8,295.31 sold at £15,757.89.
£15,757.89 - £8,295.31= £7,462.58 (Capital gains profit which I never actually kept but was recognized nonetheless) - still within the threshold.
On Bitstamp I made multiple flips as I mentioned earlier and made some decent changes - my flips on Bitstamp which I have cashed out and actually keeping in my bank account as profit is £4,391.
so the HMRC recognize I have made a profit of £ 11,817.58 Roughly (£7,462.58(Did not keep) + £4,391(Kept) ) which is below the capital gains tax threshold of £12,300.
Not sure if the Tax Technician was really sure about the calculations due to her advising she will leave some notes on my account just in case it comes up in the future. she advised they may be no tax due since the calculations we did over the phone shows I am below the threshold.
Are the above calculations correct? will I have to pay Tax? does anyone else use this method of Calculation?