Holding crypto in Ltd Company?

[willendure]

Does anyone have any knowledge of the tax and accounting treatment of crypto investments through a ltd company? I have googled and read what I can, but that has not really made things much clearer. Am I right in thinking:

* Crypto so long as its not actively traded will be taxed like any other investment?
* CGT is payable when the crypto is sold back into £
* If the amount held is too much compared with the other company assets and incomes, the company may cease to be treated as a trading company, and instead be a close investment company.

On the accounting side are there even any rules or recommendations around how to treat it? Is it:

* Marked to market? That is, in annual accounts the current £ value is booked as an asset?
* Marked to zero?
* Marked to the purchase price?
* A deprecating asset?

I will put these questions to my accountant also but they may also be unsure...

My intention is to place a small amount (<10%) of the companies assets into investments, which will include an allocation to crypto. The purpose of this will be to try and preserve the value of this capital better than holding as £. The intention is that the capital will return as £ into the company in several years time in order to fund planned product development costs.

[northernladuk]

You could try doing a search first. try Crypto company site:forums.contractoruk.com and you'll expect to find some results.

[willendure]

Tried the search. Didn't really answer any of my questions.

[willendure]

There is no such thing as CGT (captial gain tax) for companies is there? It would just be taxed at the corp tax rate.

[Lance]

There is no such thing as CGT (captial gain tax) for companies is there? It would just be taxed at the corp tax rate.

it won't be taxed when you lose money.
And if you buy it as an 'asset' won't you have to charge VAT to sell it on later?
Either way it's a terrible idea. Just get a business savings account as interest > inflation right now.

HTH

[willendure]

I don't think it falls under VAT. Same as other investments, like gold or stocks.

[willendure]

Just get a business savings account as interest > inflation right now.

Sure. But I would prefer to diversify things a little. Inflation will be back with a vengeance.

[d000hg]

it won't be taxed when you lose money.
And if you buy it as an 'asset' won't you have to charge VAT to sell it on later?
Either way it's a terrible idea. Just get a business savings account as interest > inflation right now.

HTH

You seem to be operating under the misapprehension the OP is asking for opinions on crypto as an investment, generally

[Lance]

I don't think it falls under VAT. Same as other investments, like gold or stocks.

gold attracts VAT... Except for some circumstances. So stick to bars and coins, as they are the least likely. Note that investment gold was only excluded from VAT to align with EU VAT rules. This may change.

Bitcoin doesn't attract VAT (HMRC have excluded it after a test case in Denmark I think), but it gets complex after that. NFTs will almost certainly attract it. As for other sh$tcoins, do want to be the one that gets investigated and made a test case of?

It's still a dumb idea IMO. If you really want to gamble like that, take the dividend and "invest" it personally.

[willendure]

You seem to be operating under the misapprehension the OP is asking for opinions on crypto as an investment, generally

Yes. I guess its pointless to ask here, because thats the way the thread is innevitably going to go. I think I'll just get on with buying some and then face the music when my accountant has a heart attack!

But to be clear, I'm not going to be putting much into it. Right now I think a good portfolio distribution is towards safety. 1/3 cash, 1/3 bonds, 1/3 "gold". In the "gold" section, I will divide between gold and bitcoin. I also have a separate rainy day cash pool not included in this (1 full years living costs). Might lose a few £k if it goes badly but no need to wet your knickers over my terrible terrible plan.