Transfer ownership of cypto offshore?

[fluffypanda]

I have made some good money in crypto. I think what I need is to transfer my crypto trading accounts into an offshore corporation (can you recommend a destination for this?). This is to prevent the UK from claiming that I have made a profit whilst trading and whilst resident in the UK, which is my biggest problem.

The next thing is a nice to have. I can hold my money in bitcoin at the moment, but if the price recovers to anything like it was in Dec 17 I would like a banking facility to withdraw fiat currency. Clearly this needs to be a very stable bank, otherwise I might as well just hold the balance in Tether or TUSD.

I would like to stay on the right side of the law. I don't really want to save a few tax dollars at the risk of getting arrested for fraud, tax evasion, etc. I am prepared to leave the UK for several years in the future if that is what it takes to receive the money.

 

[Martin Everson]

Well you are already on the wrong side of the law right now by not declaring your capital gains on crypto in the UK on your tax return. No tax may be due if you had a buy and hold strategy but you must declare it on your tax return. You are now seeking to hide those gains and avoid paying taxes on them in the UK if you decide to setup a offshore company or sell. This would be a floored conscious decision that will land you in jail, plus penalties and with a criminal record to completely screw your life up :-(

With that being said it is a no brainier to leave the UK (properly de-register) and then cash out. In no way try and cashout while you are UK resident or just pay the tax owned plus any penalties for not declaring earlier and sleep at night. HMRC is no joke and is very sophisticated now. They have access to not only all your internet records but also much more data than you can imagine on a global scale.

Banking facilities is no problem for cashing out bitcoin in euros other cryptos not so however.

 

[void]

Just out of curiosity - what's the UK tax rate for capital gains (like crypto profits here)?

 

[Martin Everson]

After capital gains allowance of £11,700 rates are given below depending on asset.

Capital Gains Tax

 

[fluffypanda]

I take your point Martin, although I have until January to declare and pay the tax. I have been doing research and it seems that it is better to just hold bitcoin and stay quiet. Adding people in the mix using a trust or something is probably weakening the system.

In a buy and hold strategy, I was under the impression that there is no CGT until I sell or exchange. What form/section do you think I should be putting unrealised BTC holdings in?

Is a "floored conscious decision" a technical term?

It would be a no brainer to leave the UK, but I cannot just leave and then sell.

 

[Martin Everson]

Yes their is no CGT until you sell. A buy and hold strategy carries no payable CGT as I said.

What form/section do you think I should be putting unrealised BTC holdings in?

You really need to speak to a local accountant and get it right first time around. You could however do the following and declare your bitcoin as gambling winnings which are not taxed in UK ;-)

Bitcoin tax loophole could save cryptocurrency investors millions as it leaves HMRC short

Is a "floored conscious decision" a technical term?

It is the last words you will hear in court by the prosecution to the judge in your presence...lol i.e "Your honor, fluffypanda made a floored conscious decision not to declare his bitcoin"

 

[void]

Why don't you just sell all your BTC for 1GBP to your friend or controlled company in tax/crypto-friendly jurisdiction, declare your losses to HMRC and then freely move yourself anywhere you want and buy it back for 1GBP or whatever...
What's wrong with this scenario?

 

[fluffypanda]

I am not sure if you are serious, but saying it is gambling profit is just asking for trouble and selling for 1 GBP? These are the two oldest tricks in the book.

Have you chaps heard of the 2019 Loan Charge (Disguised Remuneration)? This is a retrospective taxation going back 20 years. It creates a taxable event where one did not previously exist. It is completely bollocks of course, but that didn't stop Parliament passing the bill. So 1000s of people have huge (seven figure) bills coming next year, and they have no defense. HMRC don't even need to get a court order, they can just send you an Accelerated Payment Notice which you must pay first then contest (if you are still solvent).

Suicide helpline for 2019 Loan Charge victims urged

This 2019 Loan Charge is draconian and indicates a real and present danger. It shows the intent of HMRC (and willingness of Parliament) to bend established rules of law and accountancy to attack a minority group of perceived well-off individuals (does this sound like bitcoin hodlers?). It is tax tyranny. If the s**t hits the fan financially in the UK, they could do something similiar to make possession of bitcoin a taxable event retrospectively applied to 2009. Then what to do?

 

[void]

selling for 1 GBP? These are the two oldest tricks in the book.

Come on - I obviously didn't mean 1 GBP but some price that would put you to "not in profit" position. In many fucked up countries the government can tell you sold your house too cheaply and you have to pay more on taxes from this sell. But with crypto anyone can hardly be telling you for how much you should sell.

 

[Martin Everson]

lol...the gambling profits was a joke, don't read too much into it. You need to speak to a local accountant like I said.