Hello everyone,
I trying to find answer for my simple (i think) question but many people have different opinion that’s the reason of my post 
If my gain for tax year 2021-21 is below 12300 pounds (let’s say 7k) do i need to complete self assassment even knowing that my tax to pay is 0? I’m full time worker without any other income.
My understanding (not financial advice) is that unless your gains are above 12.3k OR you have traded over 4 times that amount (irrespective of your gains) then you need to make a return. I was surprised how high my annual trading figure was (although still below the 4xCTG allowance figure). Otherwise you do not need to report anything. Unless I go on a selling spree in the next month, I will not be above the 12.3 threshold, but I am planning on getting reasonable close to it, switching some BTC to WBTC (for more than 30 days), to lock in gains into this tax year.
Hope this helps.
Thanks!
If you exchange BTC to WBTC and value has changed there is gain/lose and with that what i understood you can exceed CGT allowance as all transactions crypto-crypto are still taxed.
Object is to create a taxable gain by selling BTC to WBTC and then if WBTC is held for more than 30 days the gain will be locked into the tax year that the BTC-WBTC sale was made. Object here is to use up the 12.3k allowance. Any taxable gain achieved this year below the CGT threshold is then dealt with and future gains will be using the new higher WBTC buying price as the cost basis.
My view is that wrapping / unwrapping could be interpreted either as being a taxable event or not until or unless HMRC start offering more precise guidance. For me it makes more sense for it not to be a taxable event as you make no change to the exposure you have to the asset BTC. If taxable, you can use wrapping/unwrapping to get round the 30 day rule. But this is the wild west even for those of us who are happy to pay fair taxes.
Calling it wrapping and unwrapping is really a bit misleading. You are selling your Bitcoin outright and exchanging it for another token that represents Bitcoin wrapped on the Ethereum network. You are NOT performing an operation on your Bitcoin and then getting the same Bitcoin back when you “unwrap it”. You are changing one asset for another. This in my opinion is a critical difference. Also by doing this you are not really avoiding taxes. You are accounting for part of them now rather than at some future later date. If you want to use up what is effectively unused CGT allowance in a given year, you have to make a taxable event in order to do so. Secondly when you sell Bitcoin there is no argument as to whether or not it a taxable event … it is … The only argument to be had is whether or not selling BTC to WBTC is changing to another asset. And here I would strongly argue it is. If you move from one asset to another for more than 30 days then when you move back you cost basis is updated.
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