Can we pool our knowledge regarding TAX and crypto and make some kind of FAQ/sticky?

correct horse battery staple wrote: »

Yeh but can you buy /rent that house with bitcoin?

Doubt it. Don't want or need to with 150k in the back pocket anyway.

2km from the beach as well, sweet!

Can the €1350 annual exemption be aggregated year on year?

For example, if €1k was invested in 2017 and cashed out for €5k in 2021, what balance is there a tax liability on?

correct horse battery staple wrote: »

If you move to let’s say Portugal next week and immediately sell 150k you are still liable to CGT here for next 3 years.

Bitcoin could be worth anything from zero to a million a coin 3 years from now.

You might've found my initial post hard to parse as you think I don't understand I have to pay CGT initially, so I'll gussy up the relevant line

grindle wrote: »

Sell 225k in Ireland, receive 150k, live pretty decently for three years in Portugal, sell all, move back if you want.

The "receive 150k" part is after CGT.

I don't really care what Bitcoin is worth but if you think it's heading to zero, short it.

Rob2D wrote: »

How does it work year on year though? Do you have to declare each year? Because that makes no sense.

Huh?

Declare what?

Rob2D wrote: »

How does it work year on year though? Do you have to declare each year? Because that makes no sense.

The normal rules of CGT apply for 99% of this activity. You'll have to understand CGT to understand your potential tax exposure and obligations. You only declare if you have a chargeable event resulting in a Capital Gain/Loss during the tax year.

Elessar wrote: »

This is an absolute socialist cuckshed of a country.

33% CGT and a measly €1200 tax free. I regularly chat with other crypto investors from the likes of Belgium/Portugal etc. where there are no taxes on crypto. Some are cashing out millions, tax free. Even in the UK the allowance is £12300 before you are taxed and then its only 20%.

We really do get shafted here with capital gains taxes.

Depends on who you are really. The country is designed to facilitate large multinationals and investment banking and anyone else, particularly the little person can go hang.

Frozen Veg wrote: »

Is there any guidance out there as to how crypto is to be reported to revenue or how payments are to be made? I.e. what section of the annual return it should be included in etc

It's been covered repeatedly. For 99% of people your profit is going to be dealt with under Capital Gains Tax. Become familiar with CGT including pay and file dates. For PAYE only individuals it's a form CG1. For self assessed it's the CGT section on your annual form 11.

I’ filling out the cgt 1 form now.
Does anyone know if I just leave lines 7-13 blank?
They seem to be related to property (604.a)
If you have filled out the form before without revenue having a problem i would appreciate knowing how you filled out these lines
Thanks

Irish_rat wrote: »

Filing tax returns is a dogs dinner.

Revenue need to leave the dinosaur technology and make the process much easier.

The non inclusion the CG1 in the annual Eform 12 tax return for PAYE individuals is out of step with most of their other returns. Pretty much every other major form is online at this stage. The CG1 form is incorporated into the self assessed annual form 11 tax return for example.

If he's putting up the money, and you are simply his nominee, holding coins that at all time belong in substance to him, and with any profit and loss being exclusively his business, then for tax purposes he treats the coins as his, and you treat them as not yours. Document this arrangement (e.g with an exchange of letters between you and your friend) and in your own records - i.e. on your trading account - make sure the coins are earmarked as his and not mixed in with any coins that belong to you.

seannash wrote: »

How do crypto loans get categorised by revenue. So if it take out a crypto loan and cash it to euros how does revenue look at that.

It's still your collateral and you're paying interest on the loan so they don't care about it. Your biggest risk is the price of your collateral dropping fast and your position being liquidated to guarantee repayment to the lender - many people have gotten rekt from a few red days affecting their loans, it's like a slightly less risky leveraged long.

seannash wrote: »

How do crypto loans get categorised by revenue. So if it take out a crypto loan and cash it to euros how does revenue look at that.

Neither borrowing money in one currency nor converting what you have borrowed to another currency is, in itself, a taxable event, so the Revenue don't look at that at all.

I'd be more concerned about the non-tax aspects of this, to be honest. What you're essentially doing here is betting against bitcoin. Suppose you borrow BTC 1 and immediately sell it for €46,000. In (let's say) 1 month you are going to have to repay BTC 1 which, right now, you don't have. You're banking on the fact that at some time in the next month you will be able to buy BTC 1 at a cost of €46,000 or less, and that you will recognise that opportunity, and that you will actually buy 1 BTC at that time. If you don't, then at the end of the month you are going to have to buy BTC 1, no matter what it costs. It could cost a lot more than €46,000, in which case you'll make an enormous loss. Or, if BTC collapses in price, you could make an enormous profit.

Note that any loss or gain arises when you repay the loan, not when you take it out, which is why Revenue ignores the taking out of the loan.

Interesting question as to whether any gain would be chargeable, or any loss deductible. I think the answer is that, yes, it would be. Essentially, by taking out the loan in BTC, you're entering into an obligation to make a payment in a currency which is not the currency of the state. That's a "currency contract". When translated into the currency of the state, the performance of the currency contract may result in either a gain or a loss. The general rule is that, if you're entering into currency contracts in support of a trade you're carrying on (e.g. you enter into a series of contracts to buy, say, sterling over the next six months, which you will use to buy supplies for your business from the UK) then any gain or loss resulting is part of the profits or losses of your trade. But if you're not borrowing the BTC because you need BTC for your trade — if you're essentially doing this to bet on the future price movement of BTC — then this is going to be liable to CGT like any other speculative investment transaction.

But don't quote me on this. It's fairly arcane stuff, and I could be wrong. Talk to an actual accountant with an actual name that you can actually sue if he gives you the wrong advice.

Elessar wrote: »

Does anyone have any idea how staking is taxed here?

And bonds that provide a daily rate back?

I'd imagine you just pay the CGT when you convert the interest/divs to FIAT or trade out to another token. I wouldn't be paying tax every time I received a payout on my stake.

When doing your PAYE annual return, where do you declare the crypto profits? Is it under 'other income' 'trading profits'?