# UK Tax Optimisation when Swapping Tokens **URL:** \ **Category:** Tax Questions\ **Created:** [September 1, 2021, 4:44pm UTC](https://discuss.koinly.io/t/uk-tax-optimisation-when-swapping-tokens/7054 "2021-09-01T16:44:22Z")\ **Posts on this page:** 4\ **Page:** 1
**Author:** ![Ahmed\_Ali](https://yyz2.discourse-cdn.com/flex052/user_avatar/discuss.koinly.io/ahmed_ali/32/4294_2.png) [@Ahmed\_Ali](https://discuss.koinly.io/u/Ahmed_Ali)\ **Post date:** [September 1, 2021, 4:44pm UTC](https://discuss.koinly.io/t/uk-tax-optimisation-when-swapping-tokens/7054/1 "2021-09-01T16:44:23Z")
I am trying to understand the tax implication (taking into account UK cost basis and Bed/Breakfast Rules) Here is the example I am trying to understand - I bought 10 ETH at price of £1700 per ETH (total £17K) - Sometime later (more than 30 days) ETH price is £2000 per ETH (total £20K). - I swap from ETH to BTC (imagine this means I got a full BTC for simplicity). This is a taxable event and it would mean I have £3000 Capital Gain which is subject to CG rules, as far as I know. - Less than 30 days, I swap one BTC back to ETH but at this swap I got 11 ETH instead of 10. Does this mean I will be taxed on both swaps or it means I just bought 11 ETH with £17000? or it means the extra ETH I got will be considered a gain and I will need to pay tax for its price at the time of the swap? Thank you ---
**Author:** ![Adrian\_Mann](https://yyz2.discourse-cdn.com/flex052/user_avatar/discuss.koinly.io/adrian_mann/32/489_2.png) [@Adrian\_Mann](https://discuss.koinly.io/u/Adrian_Mann)\ **Post date:** [September 2, 2021, 3:28pm UTC](https://discuss.koinly.io/t/uk-tax-optimisation-when-swapping-tokens/7054/2 "2021-09-02T15:28:38Z")
no it doesn’t mean you just bought 11 ETH with £17000 The answer to your question would depends on what BTC was worth when you swap the 1 BTC to 11 ETH? If you assumed the BTC was still worth £20000 when swapped for 11 ETH (£1818.18 each). assumed following transactions: | Buy/Sell | Date | Coin | Qty | Price | | --- | --- | --- | --- | --- | | B | 10-Apr-21 | ETH | 10 | 1700.0000000 | | S | 20-May-21 | ETH | 10 | 2000.0000000 | | B | 20-May-21 | BTC | 1 | 20000.0000000 | | S | 30-May-21 | BTC | 1 | 20000.0000000 | | B | 30-May-21 | ETH | 11 | 1818.1800000 | Capital gains calculation is below; TAX\_YEAR 21-22 1. SELL: 10 ETH on 20/05/2021 at £2000.00 gives GAIN of £1,818.20 Matches with: BUY: 30/05/2021 10 ETH shares of 11 bought at £1818.18 CALCULATION: Gain = £1,818.20 = ( 10 \* 2000.00 - 0.00 ) - ( 11 \* 1818.18 + 0.00 + 0.00 ) \* ( 10 / 11 ) 1. SELL: 1 BTC on 30/05/2021 at £20000.00 gives GAIN of £0.00 Matches with: BUY: SECTION 104 HOLDING. 1 BTC shares of 1 bought at average price of £20000.00 CALCULATION: Gain = £0.00 = ( 1 \* 20000.00 - 0.00 ) - ( 1 \* 20000.00 ) CURRENT PORTFOLIO ETH 11 Total number of trades = 5 Total number of buys = 3 Total number of sells = 2 INFO FOR TAX RETURN 21-22: Disposal Proceeds = £40,000.00 , Allowable Costs = £38,182.00 , Disposals = 2 21-22: Year Gains = £1,818.00 Year Losses = £0.00 ---
**Author:** ![Ahmed\_Ali](https://yyz2.discourse-cdn.com/flex052/user_avatar/discuss.koinly.io/ahmed_ali/32/4294_2.png) [@Ahmed\_Ali](https://discuss.koinly.io/u/Ahmed_Ali)\ **Post date:** [September 5, 2021, 6:14am UTC](https://discuss.koinly.io/t/uk-tax-optimisation-when-swapping-tokens/7054/3 "2021-09-05T06:14:13Z")
Adam, that’s the most comprehensive and clear answer I got so far! thank you so much! I really appreciate it! ---
**Author:** ![system](https://canada1.discourse-cdn.com/flex052/uploads/koinly_app/original/1X/7ac58e5593a7122893d066794a7254dcdb5ddb31.png) [@system](https://discuss.koinly.io/u/system)\ **Post date:** [November 4, 2021, 6:14am UTC](https://discuss.koinly.io/t/uk-tax-optimisation-when-swapping-tokens/7054/4 "2021-11-04T06:14:48Z")
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