Normal CGT rules apply to Crypto currency so essentially, yes. It's an annual return; so it's the cumulative total of your gains/losses for a particular tax year. It's not a CGT return every time you have a CGT event. And it's self assessed system. You are the one who is supposed to know what they are doing tax wise and it's up to you to carry out the calculations, pay and CGT due at the correct time and follow up with a CGT return. You can of course, employ someone to do this for you.
What would be some examples of exchange of a [CC] asset?
So for example, if I convert some BTC to XMR, I must file a tax return on that?
I see, thank you.
That's a great question!
CGT events can occur on the sale, gift or exchange of an asset. Somehow only the "sale" part of the trio seems to be the one most people remember.
How would that change? Would BTC need to be made legal tender, or something else?
For example, if I purchase gbp with my euro, and then buy a car with that gbp, the taxman doesn’t care whether my gbp was worth more/less. But if I purchase BTC and buy a car with that then I have to consider cgt.
What would need to change for BTC to be considered same as the gbp example?
I thought it was only if you converted to BTC to cash that CGT would needed to be paid. Damn.
Yes. You're disposing of your crypto.
If you make a purchase with crypto would that trigger CGT taxable event?
When your assets are liquidated to pay off your loan, that would still trigger a chargeable event for you as regards CGT if there are capital gains on them. In your example, on the 70k gain.
You must file a return even if the gain is within the small gains exemption.
Hi. I'm considering cashing out a small bit of my BTC. I know the first €1270 of taxable gains in a tax year are exempt from CGT. Can I cash out that amount in Bitcoin without going through Revenue.ie or must I also still declare it even if when I don't need to pay tax on it?
If you're going to do this at all you have to go for at least a full tax year, obviously, or it won't work. Which means that a considerable time can elapse between the date you leave and the date you actually dispose of the asset. Which means that if you're confident that it will continue to appreciate in value you can sit on it for a while longer.
Crypto (like any other asset) has no memory, and there is no inherent reason to think that, just because it attained a particular value in the past, it will or is likely to attain that value in the future. The future price of crypto will be determined by future events, and not by past events.
The relevance of the past price of crypto is this: if you reckon you can reliably identify the factors that led to crypto reaching the prices it did in 1921, you can then make a judgment about whether and when those factors are likely to recur, in which case you might hope that, when that happens, crypto will reach similarly high prices.
You'd never get that detail even with publication.
I'll probably get a few professional opinions before I'd go anywhere. Be nice to leave it as late as possible to see if prices get back to the 2021 prices.
Just curious, have there been many cases with Irish revenue pursing people abroad seeking capital taxes that may have arisen while the target was still ordinarily resident in Ireland but a non-resident? Maybe these cases just aren't given any publicity, or were settled before being included on public defaulters lists.
Sorry, my bad; I missed that detail in your post.
Yes, if you're only tax-resident in Ireland for two successive years you haven't become ordinarily resident in the first place, so you can dispose of your (non-Irish) assets in the year after the year you cease to be resident without incurring a liability to Irish CGT.
You talk about heading off in 2025. I think you should get professional advice on the exact dates you need to leave; it may be necessary for you to leave before 2025 to make this work.
On your first paragraph, you're right I've only been aware of crypto since 2021 so waited for things to come down to start investing.
On the ordinarily resident status. As far as I'm aware you need to be resident for 3 years to become ordinarily resident. And if you become ordinarily resident (after the 3 years) you don't shake off that status until you have not been resident for 3 years.
So could I keep my tax residency in Ireland to 2 years (2023 and 2024) (noting that I wasn't tax resident since 2017) then I don't enter ordinary resident status... and can leave Ireland in later 2024 or early 2025 and liquidate the assets in 2025 with no CGT liable? Making sure I don't return in 2025..
That's my thoughts from reading revenue.ie...
This isn't really a bear market, unless you think the crypto prices that prevailed around 2021 are "normal", and crypto has been in a slump at all other times before and since.
You have to not be resident for three successive years before you cease to be ordinarily resident. So if you are resident and ordinarily resident in Ireland in 2024 then the first year in which you can be not ordinarily resident will be 2028. So if your portfolio looks great in 2025 and you head off to Portugal you'll have to wait until 2028 before you dispose of your assets — by which time, of course, your portfolio may not look great.
They are good points. How would you recommend investing in the technology?
Investing in fin techs like you mentioned?
My situation is purchased alot of during this bear market and hope to make significant gains.
I only returned to Ireland in April this year after 5 years away. So can I be tax resident here in 2023 and 2024 and if the portfolio is looking great I can head off to a country with no cgt in 2025 and have no liability in ireland as I won't be ordinarily resident?
Where you thinking of going? Portugal? Switzerland? Germany? Malta?
Good, you can pay my share if I do a runner.
I don't mind contributing towards my country.
If you're confident that the bull is going to return you should leave now. You have to be three years out of Ireland to avoid liability to Irish CGT on your disposal, so if you wait until after the massive gains have accrued and then leave, you are vulnerable to another downturn in the next three years.
Ideally, you want to be already out of Ireland for more than three years, and already resident in a country with no CGT, when the next bull happens so that you can cash in on it.
...
I thought the whole idea of crypto was to make a fortune, leave Ireland for a crypto tax free country and live the good life.
I turned 2.5k into 300k last bull run, held on with dreams of the good life away from Ireland , now back at 50k🤪, even more determined to get out of here when the bull returns, FF/FG/Greens won’t be getting a penny tax from me to pay for their idiotic policies.
Are you describing the method described here, and if so can you confirm it is all completely legal? https://irishfinancial.ie/how-to-avoid-tax-on-crypto-in-ireland/
I have been thinking about how this would work, and any tax implications, taking a loan at the top of the market and not at the top of the market, and if it could offer any benefit when trading rather than investing.
I see others discussing how depending on the number of trades you may be deemed a trader and assessed by PAYE. Have any of you set up a small limited company to be more tax efficient?
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