"blag-it" Forum
Socio-economic and political related topics => Economic and political general discussion => Topic started by: A.Jenery on 11 February, 2021, 09:28:00 PM
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Someone buys or has produced £4200 worth of Bitcoin and it doubles in value in a short while.
Half of it is sold to protect the initial investment and the other half is left in Bitcoin to see what happens:
Is tax liable for the £4200.00 they took out because it's considered profit? Or is it not considered profit because it's the same amount they initially invested?
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I'm no expert, but buying or producing bitcoin (which isn't cheap in term of hardware investment or running costs) would I think be considered an investment, but you may be liable for tax on the half that you sell if your total profits so far is more than £12,500 which is the tax threshold for 20/21 for self-employed people.
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I'm no expert, but buying or producing bitcoin (which isn't cheap in term of hardware investment or running costs) would I think be considered an investment, but you may be liable for tax on the half that you sell if your total profits so far is more than £12,500 which is the tax threshold for 20/21 for self-employed people.
Strictly speaking not more than £12500 net profit, I think, so after expenses, etc. Before it's gross profit so turnover. You're taxed on net profit...
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Interesting topic and point raised by OP! 8)
The initial £4200 is an investment/expense. The second £4200 generated from sales is gross profit. What's left after expenses is net profit therefore maybe liable to tax if total net profit for 20/21 is more than £12500. I think that's about it.
Admin
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Interesting topic and point raised by OP! 8)
The initial £4200 is an investment/expense. The second £4200 generated from sales is gross profit. What's left after expenses is net profit therefore maybe liable to tax if total net profit for 20/21 is more than £12500. I think that's about it.
Admin
This is about right according to UK tax info I looked at while reading this. Less than 12,500 there's no tax, but more than this and you might have to pay on the net profit, not sure though.
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You will also e liable for N.Insurance if your net income is more than 12,500
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Thanks everyone for the great pointers! So as I understand it from what's been said, if it doubles in value to £8400 tax is only paid on the second £4200 if my total net profit is not more than £12500? I think I get that, but what if the second £4200 pushes the total net profit to over £12500? Would tax be liable on the whole £4200?