UK CGT Pooling Rules

Tax Questions
#1

Like many I’m trying to understand the CGT rules and how best to navigate them.
I’m trying to work out if it makes financial sense to add to an existing allocation with a shorter term time horizon. I have done some reading but would like to check if this is correct.

Say I have already used up mu CGT threshold to keep it simple.

Say I bought £10k on BTC a over a year a go and its now worth £30k. I then buy another £10k worth of BTC and then 40 days later I sell £10k worth of bitcoin and the price per coin is the same as when I bought the £10k 40 days ago.

Do HMRC now see that as a profit because it gets pooled? So CGT would be about £5k on that sale if that makes sense. Even though the last purchase has not made any money.

I assume Koinly works all this out for me.

Many thanks for any help.

#2

Hi @Nic

You should consider HMRC’s pooling rules (section 104 pool).

But yes, HMRC may treat this as a gain depending on the average cost of your pooled BTC.

If you’re unsure about specific calculations, it’s a good idea to consult a tax professional. Of course, Koinly takes care of this for you as long as you make sure the data imported is accurate. For more guidance, check out: Koinly’s UK Crypto Tax Guide.

Here is our guide for share-pooling in the UK:

https://koinly.io/blog/calculating-crypto-taxes-uk-share-pooling/