Reply to: Investing in crypto currencies via LTD company account??

[Zylon]

Thanks @Maslins - really useful. Will be interesting to also see if crypto becomes more mainstream.

I expect they'll be a serious competitor to Swiss banks soon enough. While large companies can legally avoid tax via complex if ethically dubious avoidance schemes, many individuals using offshore banks are just doing it illegally and hiding it.

[northernladuk]

I think OP is referring to a different "bed and breakfasting" rule, WRT to CGT:

https://www.oldmutualwealth.co.uk/Ad...rules-and-cgt/

Yes sorry. It was just a point that he mentioned the bed and breakfasting option to fund this and the other thread seems to generally advise against using that method to fund the investments. I've confused the two by trying to link the theme.

[TheCyclingProgrammer]

Because people on the other thread are advising against using bed and breakfasting in this way possibly?

I think OP is referring to a different "bed and breakfasting" rule, WRT to CGT:

https://www.oldmutualwealth.co.uk/Ad...rules-and-cgt/

[Tinfed]

Because people on the other thread are advising against using bed and breakfasting in this way possibly?

The other thread was about directors loans from Ltd Companies. This one is about capital gains tax on personally held assets. I think these are separate situations?

[northernladuk]

Hi Jo, why not trade through a 31 day period where you think the price will dip?

Sell your cryptos. Use the tax free threshold. Wait 31 days to meet bed and breakfasting rules. Then buy again one month later. You'll be out of the crypto market for 1 month of the year which you can use to your advantage if you time the market right.

I agree with others here that you could sell to your Ltd company, but that will cause more regulatory issues to worry about than it's worth. Even if it doesn't break any of the rules.

Because people on the other thread are advising against using bed and breakfasting in this way possibly?

[Tinfed]

I want to sell some just under the CGT threshold to lock in some profit at the current high prices (I need the cash). However I genuinely believe they will go a lot higher so still wish I could keep the upside somehow.

Hi Jo, why not trade through a 31 day period where you think the price will dip?

Sell your cryptos. Use the tax free threshold. Wait 31 days to meet bed and breakfasting rules. Then buy again one month later. You'll be out of the crypto market for 1 month of the year which you can use to your advantage if you time the market right.

I agree with others here that you could sell to your Ltd company, but that will cause more regulatory issues to worry about than it's worth. Even if it doesn't break any of the rules.

[chopper]

I thought about selling them to my company

Replace "Cryptocurrency" with "a house" - If you personally own a house (e.g. a BTL) and decide to sell it to your limited company, then that is legitimate provided you do it at fair value.

The same would apply for a cryptocurrency.

[Lance]

Been giving some thought to this.

Situation, I bought a few Cryptos (personally) a long time back to actually play with the underlying tech. It wasn't an investment at the time. Since they took off I want to sell some just under the CGT threshold to lock in some profit at the current high prices (I need the cash). However I genuinely believe they will go a lot higher so still wish I could keep the upside somehow.

I thought about selling them to my company (yep will get clobbered with corp tax when I sell but better than nothing ). It would be < 10% company reserves so don't think it will be CIC issue. However it feels like something HMRC may object to, selling a personal asset to the company that would be a company investment. Thoughts? I would sell at the market rate at the moment I transferred into a company address. Would even get a hardware wallet for the company specifically. Would be cheaper than paying exchange fees to (if I sold to exchange and then had company buy from exchange).

Would it make a difference if I was a contractor in the crypto field?

Thanks

You seem to know the ins and outs of it. As long as you can prove that you sold at fair market price I cannot seen an issue (IANAL).

However...... WHY??????? Just sell 'em and trouser the cash. IASNAL but this has got to be lower risk than the chance of an IR35 investigation. I'm not condoning tax evasion, but this is arguably gambling (tax free) and so easy to hide for the relatively small amounts you're talking.
And if under CGT threshold then not even evasion.

[jobloggs]

Why would you want to do this?

I need the cash but if I pull out more dividends I will pay a higher rate of tax. I haven't used my CGT allowance so if I sell to company I can use that.

[Maslins]

I thought about selling them to my company (yep will get clobbered with corp tax when I sell but better than nothing).

Why would you want to do this?

[Maslins]

His statement about keeping investments assets would still stand whether they do or don't surely?

Yes, ish.

To my mind if cryptocurrencies become more mainstream, to the extent that people start to regularly use them to buy and sell normal stuff (ie rather than just something you buy as an investment, like gold), then surely the rules would drift towards it simply being a foreign currency like $US or Euros. That would then mean each year you'd need to revalue your holding, and pay tax on any unrealised gains/get relief for unrealised losses. Ie even before you sell them you could be taxed.

...but yeah, there's no direct correlation between them becoming mainstream and HMRC changing the rules.

[jobloggs]

Been giving some thought to this.

Situation, I bought a few Cryptos (personally) a long time back to actually play with the underlying tech. It wasn't an investment at the time. Since they took off I want to sell some just under the CGT threshold to lock in some profit at the current high prices (I need the cash). However I genuinely believe they will go a lot higher so still wish I could keep the upside somehow.

I thought about selling them to my company (yep will get clobbered with corp tax when I sell but better than nothing ). It would be < 10% company reserves so don't think it will be CIC issue. However it feels like something HMRC may object to, selling a personal asset to the company that would be a company investment. Thoughts? I would sell at the market rate at the moment I transferred into a company address. Would even get a hardware wallet for the company specifically. Would be cheaper than paying exchange fees to (if I sold to exchange and then had company buy from exchange).

Would it make a difference if I was a contractor in the crypto field?

Thanks

[Lance]

Slightly unrelated but not entirely. I can see 2 illegal uses for crypto currencies (other than the obvious ones around having people murdered by the dark web, and drugs).
1) Using a trail of crypto transactions to embezzle money out of a company. Not all currencies are traceable like BTC. Some are completely hidden and therefore a 'loss' for a company could actually be a totally hidden siphoning of funds. How it turns into cash is still a problem, but it may not necessarily be tracked as easily.
2) Money laundering. Although getting the cash into the crypto is the harder part for this use. Does Western Union do cash to BTC yet?

[northernladuk]

Thanks @Maslins - really useful. Will be interesting to also see if crypto becomes more mainstream.

His statement about keeping investments assets would still stand whether they do or don't surely?

[saptastic]

Thanks @Maslins - really useful. Will be interesting to also see if crypto becomes more mainstream.