UK 2024 Crypto Tax Rules Update

Check out my previous videos on the new cryptocurrency regulations in the UK (in chronological order):

New Cryptocurrency Regulations Come Into Force In The UK:

New Crypto Regulations Being Implemented in the UK From April 2024. Crypto tax rules part 1:

New UK Stablecoin Regulations:

Which Crypto Exchanges Have Been Approved Following New UK FCA Regulations. Top UK exchanges 2024:

UK Crypto Exchanges FCA Regulations Update:

In today’s video I cover:
An example of having to pay capital gains tax on your crypto gains.
What crypto tax deductions or expenses you can claim to reduce your Capital Gains Tax e.g. transaction fees.
What the AEA (Annual Exempt Amount) is?
When you might have to pay income tax on your crypto.
Whether you can gift crypto tax free to a wife or husband.
Whether you can offset crypto losses against your gains or profits.
Whether you’d have to pay inheritance tax on crypto.
What records you need to keep as a crypto investor etc.

It has never been more important to educate yourself financially.

Contact me here if you are interested in working with me:
facebook.com/jameskaylive
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Chapters:
0:00 – Intro
1:22 – When do you have to pay crypto tax?
2:35 – Crypto tax deductions
3:24 – Gift crypto to spouse or civil partner
3:34 – Offset crypto losses
3:43 – Capital Gains Tax example
5:43 – Income tax on crypto
6:42 – Crypto inheritance tax
7:00 – How can the government track this?
7:40 – Crypto records you must keep

Disclaimer:
The information contained in this video is for informational purposes only. Nothing shall be construed as financial advice. The content is solely the opinions of the speaker who is not a licensed financial advisor. The speaker does not guarantee any particular outcome.

#cryptoregulation
#uk
#cryptotax
#crypto

The aim of this video is to clarify and expand on a few of the aspects of the new cryptocurrency tax regulations in the UK following my last few videos on these which I’ll include links to here and in the description if you haven’t watched them yet and we’ll be looking at

Several things in this video such as going through an example of having to pay capital gains tax on your crypto gains when you might have to pay income tax on your crypto looking at whether you can gift crypto taxfree to a wife or husband for example whether you can

Offset losses against your gains or profits whether you’d have to pay inheritance tax on crypto what records you need to keep as a crypto investor Etc as always none of what I cover is financial or tax advice but it’s simply education and I’d just like to take this

Opportunity to just thank so many of you who have liked the videos subscribed to the channel and added some really kind and useful comments for everyone to see so please do like this video And subscribe to the channel so I can continue to offer more content for you

In future and let’s jump straight in and take a look at these rules on crypto tax what we need to report as individuals operating in the UK firstly when do you have to pay crypto tax well you only have to pay tax on your crypto when you dispose of or sell your crypto and that isn’t only if you sell your crypto back into fat currency like pounds for example the government’s definition of a disposal

Includes if you sell swap or exchange one cryptocurrency for another if you use crypto to pay for goods or services and if you give away tokens or coins to another person unless if it’s a gift to your spouse or civil partner which I will mention again in a bit and you’ll

Only need to report it and pay tax on your gains or profit with the tax that you’d need to pay being called capital gains tax everything is obviously subject to change with the government and everything covered in this video isn’t financial advice but simply education as I mentioned previously but

Capital gains tax is currently 20% if you’re a higher or additional rate income tax payer and normally but not always 10% if you’re a basic rate taxpayer depending on how low your gains are and we’ll look at these figures again a bit later in the video when we

Go through an example you can offset a few costs against the gains you make to reduce your capital gains tax bill and these include firstly the transaction fees you paid also the aea or annual exempt amount which is your tax-free allowance which will only be £3,000 from April 2024 and by the way

This was £1,300 in 2022 to 23 so you’re essentially paying capital gains tax now on 9,300 more than you would have been 2 years earlier and you can see here the increase in tax that the government is estimating it’s going to bring in based on this in millions of pounds so 425

Million more p in 2025 to 2026 due to the reduction in capital gains tax allowances you can also gift your crypto to a spouse or civil partner and use use their aea of £3,000 to reduce your capital gains tax slightly and finally you can offset losses against capital

Gains tax currently for up to 4 years in the future with hmrc so let’s look at a basic example of this to hopefully make it clear so let’s say you have one BTC held in Cold Storage hopefully and you bought it at £20,000 just as as an example to make

The numbers easy for the purpose of this video then let’s say the price of BTC reaches £ 100,000 in early 2025 and you decide you want to sell it and I’m not going to be looking into investment strategies here for example whether you should actually be selling that BTC or

Not I’m simply looking at the rules the government’s imposing on us here and going through an example but you’d obviously have made a £80,000 profit so let’s now look at taking the deductions off that game that you don’t have to pay tax on so firstly transaction fee uh

Let’s just say £20 the aea of only £3,000 if we’re selling after April 2024 in this example I’m going to gift £3,000 of my crypto to my wife to sell and use her aea of £3,000 and that as you can see here leaves a gain of £

73,9 180 if you’re a higher rate taxpayer so you earn more than ,27xn- currently or you’re an additional rate taxpayer so you earn over 125,1 140 currently then you’ll need to pay 20% capital gains tax on your gains but if you’re a basic rate taxpayer though so you earn less than 50,

270 and you had the gain we saw above of £ 73,9 180 then you’d pay 10% capital gains tax on your gains up to the higher rate tax rate and then 20% on an above this so hopefully this basic example helps but I would always advise contacting an accountant who specializes

In crypto or who at least has a good understanding of the crypto tax rules as it can get quite complex and let’s now move on to when you might have to pay income tax on your crypto according to the UK government rather than capital gains tax well firstly if you receive

Crypto as income then that would be subject to income tax and National Insurance contrib r butions on the value of the asset for example if you’re a regular Trader and are seen as making an income from your crypto business then income tax could apply some staking also

If it’s seen as income rather than a trade then that would fall under miscellaneous income tax also and if you gained new cryptocurrencies through staking then you might have to pay capital gains tax on them if you sold them later at a gain and as with all things tax and crypto I suppose

It’s a bit of a rabbit hole which can get quite complex for example if you’re into crypto mining or airdrops what tax would be due and I won’t be going into those for that very reason in this video and I think it’s worth mentioning though that inheritance tax on crypto is

Treated the same as it is with property so that would apply although you obviously have the complexity of private keys and how to pass them on but if the private keys are lost and the crypto isn’t accessible then you wouldn’t be liable for capital gains tax and how

Will the authorities government or hmrc in this case know which tax is due and even if it is well firstly you’ll need to work out what taxes due yourself and report this yourself to hmrc and if you’ve used centralized exchanges that are approved by the FCA to operate in

The UK even historically they will be reporting customer data to them so they can track this and Chase up those who don’t pay tax on their gains or on their earnings so for example if they saw you added £10,000 onto an exchange and then 00,000 went back into your bank then you

Might be asked some questions if you didn’t declare it and also let’s look at the crypto records that you’re required to keep and to report on according to hmrc and the government so if you’ve made a gain for example after selling a cryptocurrency as we saw earlier in the

Video the following are the records you’ll need to keep according to the government the type of crypto asset or cryptocurrency the date of the transaction if they were bought or if they were sold the number of units involved the value of the transactions in pound sterling as at the date of the

Transaction the cumulative total of the investment units held and finally bank statements and wallet addresses so that ends this video providing an update on crypto tax in the UK but as always I’d love to know what you think in the comments below and if you are interested

In more of tailored approach to your general crypto education and you think you’d benefit from having someone look over your shoulder and guide you on your journey I do offer onetoone coaching to those who have the desire and the means to educate themselves further and there are links in the description where you

Can message me and book in a free video call to see if we’ be a good fit and if you found this content interesting please do like the video and subscribe to the channel as it really does help and have a great day