CRYPTOCURRENCIES – TAXATION AND PLANNING

Background

The founder of Fusion Partners, Anthony, is a self confessed geek. He loves all things tech and is always involved in new and upcoming ideas. Sadly, when a friend introduced him to Bitcoin back in 2010 this was one of the few times he’d dismissed a new technology without realising the potential it had. 7 years later in 2017 we started to get approached by clients who had started to make some real profits from crypto, and shortly after looking into the technology, Anthony was not only advising on the tax consequences, but was hooked.

He bought crypto, traded crypto and looked into what it meant and how the systems worked. Before long he’d built his own mining rig with some old GPUs. Not long after the garage at home was whirring away with a dozen mining rigs and ASICs. Then came the world of DeFi, with it’s endless complexity and opportunity. NFTs, metaverse, staking, liquidity provision and more made it interesting but increasingly complex and consequently clients (and their accountants/lawyers and IFAs) needed more help from a specialist.

Crypto had become extremely successful in it’s own right, but at the same time had created problems. “How do you account for a sale of ETH to BTC and back again?” was the simple early question. Then things became more complex – how is staking taxed? Is providing liquidity a disposal? What happens if you borrow tokens rather than sell them? What happens when my exchange goes bust??

The success of some investors allowed them to leave the UK meaning they were no longer subject to UK tax on their Crypto – but where do you go? Technical questions around the situs of cryptocurrency means non-domiciles are unsure whether they are taxable. Should I hold my crypto in a company or in a trust? Can I set up an offshore structure?

HMRC, bless them, have done their best to provide guidance. However, it requires a certain level of interpretation once you get into the DeFi manuals.

Then comes the accounting for crypto. In the early years clients would have a few dozen trades in a year. Now some may have tens of thousands? How do you deal with this, record fees, pool tokens, calculate sterling values of every one of these transactions (as for UK tax all transactions must be recorded in GBP).

Well that’s where we come in. With a wealth of knowledge, real world practical experience, the right software, advice and understanding we can guide you through your crypto journey.

But wait! Oh no – what if I haven’t disclosed my crypto tax? How will they know? See Coinbase Reportedly Warns Some UK Users It’s Handing Their Details to the Taxman – CoinDesk to find out how. We’ve helped a number of clients undertake disclosures to HMRC, meaning they can sleep safely at night.

Finally some clients actually want to spend their crypto – we’ve provided ‘crypto proof of wealth’ reports to clients where we’ve been able to analyse historic blockchain activity, review exchange logs and convince banks and lawyers that our clients aren’t criminals!

Want your crypto to be tax free!?! See here for more info on our Crypto Pension Scheme: 

Crypto Pension Schemes – Fusion Partners

Contact Anthony to find out more. You can reach him on info@fusionpartners.co.uk

Alternatively he runs a telegram group here: Crypto_tax_UK