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Capital Gains tax-Crypto?

  • 12-03-2021 4:08pm
    #1
    Registered Users Posts: 61 ✭✭ KevMayo88
    Registered User


    This is one I'm vague on guys, so appreciate the help. Lets say you buy Bitcoin and intend to sit on it for a few years as an investment. Would you have to tell revenue this on your 2021 returns, even if its an investment you plan to hold in your online wallet?


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Comments

  • Registered Users Posts: 65 ✭✭ Refractions
    Registered User


    KevMayo88 wrote: »
    This is one I'm vague on guys, so appreciate the help. Lets say you buy Bitcoin and intend to sit on it for a few years as an investment. Would you have to tell revenue this on your 2021 returns, even if its an investment you plan to hold in your online wallet?

    You haven't gained anything (in fiat terms) until the moment you cash it out, so no.


  • Registered Users Posts: 11,195 ✭✭✭✭ Lex Luthor
    Registered User


    sure the banks are printing money like toilet paper at the moment, why would you pay CGT?


  • Registered Users Posts: 6 ✭✭✭ looks like rain ted
    Registered User


    You haven't gained anything (in fiat terms) until the moment you cash it out, so no.

    Some Countries want you to declare transfers between cryptocurrenies too. Is this the case with ireland?


  • Registered Users Posts: 6,026 ✭✭✭ grindle
    Registered User


    Some Countries want you to declare transfers between cryptocurrenies too. Is this the case with ireland?

    Yep. A disposal is a disposal, you confirm that you're dollar-rich the moment you buy something that would have cost X amount of dollars.


  • Registered Users Posts: 2,525 ✭✭✭ Irish_rat
    Registered User


    KevMayo88 wrote: »
    This is one I'm vague on guys, so appreciate the help. Lets say you buy Bitcoin and intend to sit on it for a few years as an investment. Would you have to tell revenue this on your 2021 returns, even if its an investment you plan to hold in your online wallet?

    If you hold then no you don't


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  • Registered Users Posts: 157 ✭✭ bingobars
    Registered User


    Anyone have any idea of revenues stance on…

    Forking
    Airdrops
    Yield farming
    Liquidity pooling
    Staking
    NFT profits


  • Registered Users Posts: 6,026 ✭✭✭ grindle
    Registered User


    bingobars wrote: »
    Anyone have any idea of revenues stance on…

    Forking
    Airdrops
    Yield farming
    Liquidity pooling
    Staking
    NFT profits

    All are income earned except forks and airdrops, you have to claim them for them to be considered as income.

    NFT profits could be CGT if you're buying and selling later rather than investing in the production of one and then selling it immediately at release/auction time.


  • Registered Users Posts: 286 ✭✭ mossy95
    Registered User


    grindle wrote: »
    Yep. A disposal is a disposal, you confirm that you're dollar-rich the moment you buy something that would have cost X amount of dollars.

    How the heck would they find out about it though


  • Registered Users Posts: 6,026 ✭✭✭ grindle
    Registered User


    mossy95 wrote: »
    How the heck would they find out about it though

    If your money is poured into a KYC-friendly exchange (most of the good ones) and flowing out, your transactions are noted. Blockchain is designed for this and there are a few companies already set up to note which wallets you interact with and which wallets they interact with. It's a dream for data analysis.


  • Registered Users Posts: 6,026 ✭✭✭ grindle
    Registered User


    e.g.
    You buy a sh!tload of Sh!tCoinX through ReputableExchange.com, you move your coins to Uniswap - they can see what you're doing and there's already a large industry built around this now.


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  • Registered Users Posts: 2,875 ✭✭✭ KilOit
    Registered User


    grindle wrote: »
    e.g.
    You buy a sh!tload of Sh!tCoinX through ReputableExchange.com, you move your coins to Uniswap - they can see what you're doing and there's already a large industry built around this now.

    They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
    I work in a government department, they are not even remotely capable of doing what you suggest here
    I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar


  • Registered Users Posts: 6,026 ✭✭✭ grindle
    Registered User


    KilOit wrote: »
    They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
    I work in a government department, they are not even remotely capable of doing what you suggest here
    I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar

    Not sure where you got the idea but I never said the government would do it personally, I'm more than aware of how backwards they are. There are multiple firms they can hire which use machine learning to sort and order all blockchain transactions, Chainalysis being the largest or most well-known and there's CipherTrace & Elliptic as well.

    Anybody putting more than a tenner a week into crypto for a few years will likely have the opportunity to pull tens or hundreds of thousands out at some point and when that happens they will be on the radar.


  • Registered Users Posts: 47 SkyRevNet
    Registered User


    KilOit wrote: »
    They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
    I work in a government department, they are not even remotely capable of doing what you suggest here
    I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar

    They don't need fancy tech. In the not so distant future, as regulation starts to catch up, they'll be able to request information from the various KYC exchanges or, possibly, those exchanges will be obliged to file certain returns/reports when certain conditions are triggered by an account holder e.g. cashing/transferring large crypto balances.


  • Registered Users Posts: 545 ✭✭✭ shawki
    Registered User


    KilOit wrote: »
    They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
    I work in a government department, they are not even remotely capable of doing what you suggest here
    I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar

    Such a stupid incorrect post.


  • Registered Users Posts: 1,213 ✭✭✭ wally1990
    Registered User


    KilOit wrote: »
    They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
    I work in a government department, they are not even remotely capable of doing what you suggest here
    I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar

    Not being smart but Are you just on here looking for confirmation to not declare income subject to capital gains
    or (income tax etc )and look for excuses (not reasons) as to why ?

    In all honesty, nobody on here is going to advocate to do that

    There is tax rules and laws in place and we are to abide by them.

    You and God knows how many people have been down this path before.

    Dont declare it if you don't want to but getting into the situation or area of ' they are backwards, or how would they know or whatever else excuse is pointless

    Go open an account in Panama and join mossack Fonseca if they are still about :)


  • Moderators, Business & Finance Moderators Posts: 2,449 Mod ✭✭✭✭ Rob2D
    Moderator


    wally1990 wrote: »
    There is tax rules and laws in place and we are to abide by them.

    For now we do. But for the next cycle I'm going to do my best to avoid it. 33% with a grand allowance is an absolute joke. Especially considering the current government we have to give it to.


  • Registered Users Posts: 5,259 ✭✭✭ The J Stands for Jay
    Registered User


    KilOit wrote: »
    They can barely use emails, still in fax age, you think they have the ability to go through 1000's of transactions from defi to cen exchanges for 1 user?
    I work in a government department, they are not even remotely capable of doing what you suggest here
    I still declare myself but unless you are pumping 1000's into your bank account you are not on their radar

    Faxes to Revenue? You mean the same crowd who communicate via secure online messaging, exchange XML data files with other tax authorities and have financial institutions upload data on payments made to customers?


  • Registered Users Posts: 161 ✭✭ Lorne Malvo
    Registered User


    Guys; Would you need to declare CGT if you transfer to a stable coin whilst resident in Ireland?

    Also, If you leave Ireland for Portugal and set up residence there, and apply for split year relief whilst in Ireland, would you be exempt from CGT to revenue in Ireland if you make any trade to your crypto in Portugal?


  • Registered Users Posts: 92 ✭✭ dougal0691
    Registered User


    Guys; Would you need to declare CGT if you transfer to a stable coin whilst resident in Ireland?

    Also, If you leave Ireland for Portugal and set up residence there, and apply for split year relief whilst in Ireland, would you be exempt from CGT to revenue in Ireland if you make any trade to your crypto in Portugal?

    the answer to the first question is the same as last week, if you make a gain on the transaction you owe capital gains tax on the gain.

    others here will have more knowledge on the 2nd question.


  • Registered Users Posts: 330 ✭✭ HGVRHKYY
    Registered User


    Guys; Would you need to declare CGT if you transfer to a stable coin whilst resident in Ireland?

    Also, If you leave Ireland for Portugal and set up residence there, and apply for split year relief whilst in Ireland, would you be exempt from CGT to revenue in Ireland if you make any trade to your crypto in Portugal?

    Only after you've been nonresident and non domiciled in Ireland for >3 years, so technically you'd need to be living in Portugal for 4 years, on the 4th year then you can trade without worrying about our CGT


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  • Registered Users Posts: 330 ✭✭ HGVRHKYY
    Registered User


    McGaggs wrote: »
    Faxes to Revenue? You mean the same crowd who communicate via secure online messaging, exchange XML data files with other tax authorities and have financial institutions upload data on payments made to customers?

    Any info on this? Curious what it means, thanks


  • Posts: 0 ✭✭ [Deleted User]
    Registered User


    If you're talking about the 'XML' part then it's simply a file format - very useful for exporting/importing data into different systems. It may as well have been written as "...exchange data files..."

    If you mean the format and actual contents of these files then you need someone else to answer.


  • Registered Users Posts: 161 ✭✭ Lorne Malvo
    Registered User


    HGVRHKYY wrote: »
    Only after you've been nonresident and non domiciled in Ireland for >3 years, so technically you'd need to be living in Portugal for 4 years, on the 4th year then you can trade without worrying about our CGT

    What about 'split year relief'


  • Registered Users Posts: 11,195 ✭✭✭✭ Lex Luthor
    Registered User


    does anyone declare the free tesco vouchers they get? its similar as staking rewards but nobody declares them


  • Registered Users Posts: 3,855 ✭✭✭ relax carry on
    Registered User




  • Registered Users Posts: 620 ✭✭✭ Idioteque
    Registered User


    Lex Luthor wrote: »
    does anyone declare the free tesco vouchers they get? its similar as staking rewards but nobody declares them

    How's it similar to staking?


  • Registered Users Posts: 330 ✭✭ HGVRHKYY
    Registered User


    What about 'split year relief'

    Not too sure on that, you'd be better off having a word with a good tax advisor that knows about the specifics, plenty on here would love to hear the details as well I'd say, and fair play to anyone who successfully manages it!

    Thanks for that! That ties in with the importance of sticking to the rules 100% for anyone who'd be relocating to other EU countries so


  • Registered Users Posts: 5,259 ✭✭✭ The J Stands for Jay
    Registered User


    HGVRHKYY wrote: »
    Any info on this? Curious what it means, thanks

    Google FATCA and CRS.


  • Registered Users Posts: 1,165 ✭✭✭ LawBoy2018
    Registered User


    What about 'split year relief'

    How would split year relief make any difference if you're ordinarily resident here in Ireland?


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  • Moderators, Society & Culture Moderators Posts: 25,535 Mod ✭✭✭✭ Dades
    Would you like to know more?


    Basically you can't just spend half a year outside of Ireland and avoid tax.

    You need to be non-resident for 3 years (non-ordinarily resident) for gains such as crypto to drop out of the net.


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