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Are you an accidental bitcoin tax avoider?

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Are you one of the many millions of people who saw the price of bitcoin start rocketing in 2017? Are you one of the hundreds of thousands who bought in? Are you one of the thousands of buyers who is resident, for tax purposes, in the UK?

If your answer is yes to the last question, you need to take a deep breath and read on.

USE ETORO’S CRYPTO TAX CALCULATOR

Cryptocurrency is still in its infancy as far as regulators are concerned, with few rules around what you can do with bitcoin and its peers and what can be done to you with it.

While it’s not the Wild West, you’re advised to use registered and regulated platforms, such as eToro, to trade and invest to ensure the best protection from scams.

But if those who make the legal application around burgeoning financial trends are a bit behind the curve, those seeking to tax it are not.

You might not be aware, but if the size of your pot of bitcoin – or other crypto – has risen considerably since you bought it, you need to be thinking about your potential liabilities to HMRC.

FIND OUT IF YOU OWE TAX

In December, HMRC published a list of ways your bitcoin can make you liable for a range of taxes. The main one for those who bought the rising bitcoin in 2017 and promptly forgot about it is the potential for Capital Gains Tax to be paid when you do get around to selling it (or already have).

CGT is a levy on the things you make a profit from for doing very little. For example: you buy a house, live in it for 20 years and sell it on for double what you paid. Unless you knocked the place down and rebuilt it (at considerable expense), HMRC would likely demand you paid it some CGT.

A painting you bought at a car boot sale for £1 turns out to be a Rembrandt? The couple of million you make from selling it at auction is liable for CGT.

It’s the same with cryptos. Just because you got in at the right time, doesn’t mean the taxman lets you off. Like with other investments, cryptocurrencies held specifically to make money are classed by HMRC as “chargeable assets” and incur appropriate taxes.

READ ETORO’S CRYPTOASSET TAX REPORT

It is also up to you, the investor, to inform HMRC that you have made the gains and offer up the cash. If you don’t there will be some tough questions to answer (and potentially fines to pay).

Two important points: CGT is only applicable when you *sell* the asset, not when you just keep holding on and you also get an allowance of £12,000 a year that is CGT-free, but this has to be shared with any other type of asset you sell or dispose of.

But if you got in very early and intend to make a tidy profit from your crypto-savviness, take a look in your digital wallet and have a think about how much you could end up owing.

To help you understand how this new tax regime might affect you, eToro has created a crypto tax calculator, infographic and crypto tax guide.

You can also listen to eToro, HMRC and ICAEW explore the cryptoasset landscape, the future of crypto, the tax levy and dispel common misconceptions in our webinar here.

LISTEN HERE

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework. Your capital is at risk CFDs work, and whether you can afford to take the high risk of losing your money.

Applies to UK taxpayers only.

The information above does not constitute financial advice, always speak to a tax professional to ensure it is right for your specific circumstances.

eToro does not represent any government entity. You should check with a tax professional or HMRC if you are paying the right amount of tax.

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GoodDollar presents Decentralised Cryptocurrency at OECD Blockchain Policy Forum

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Yoni Assia, Chief Executive of multi-asset trading platform eToro, took the stage at the second Global Blockchain Policy Forum, recently hosted by the Organisation for Economic Co-operation and Development (OECD), to present the not-for-profit GoodDollar project.

The blockchain ecosystem is moving fast with pressure on governments and institutions to keep abreast of the latest innovations. At the prestigious event, held in Paris, the OECD gathered industry leaders together for the second year in a row to discuss the hype around cryptocurrencies and the possibilities that the technology brings to make social impact and lasting change.

Mr Assia told delegates that GoodDollar is launching a decentralised cryptocurrency – also called GoodDollar, or G$ – powered by blockchain, in a bid to reduce global wealth inequality and “fix one of the biggest problems in the world”.

“Today, 94 per cent of the wealth in the world is actually held by the top 20 per cent,” he said. “An even more mind-blowing number is that the richest 26 people in the world have more wealth than the lower 3.8 billion.”

“A lot of very smart and very wealthy people understand that this is a big issue and they understand the responsibility of the elite, or top percentiles, to make sure that we fix this problem before it becomes too significant.”

Mr Assia explained that because of the development of cryptocurrencies and blockchain…

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eToro’s new open-source programming language is first step in bringing $500 trillion OTC derivatives market onto the Blockchain

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-Lira is first project born out of eToro’s acquisition of smart contract company, Firmo, earlier this year –

eToro, the global multi-asset investment company, has today released the details of Lira, a new open-source programming language for financial contracts. Lira is the first step in bringing the $500 trillion OTC derivatives market onto the Blockchain by introducing a new formal contract language.(i)

Lira is a domain-specific language that can be used to write OTC financial contracts for assets currently on the Ethereum blockchain. It is both secure and easy to programme whilst guaranteeing self-executing global settlement and automated trade reporting and monitoring. It’s easy tracking and compression will enable better collateral requirement efficiencies. Furthermore, it is the first decentralised finance (DeFi) project that will look to expand the code across different blockchains now that it is open-sourced.

Yoni Assia, CEO and Co-Founder of eToro, commented: “Bringing the OTC derivatives market onto the blockchain will bring more transparency and capital efficiencies to the industry. Activities in the post-trade cycle, such as settlement and the clearing of derivatives, are both expensive and a source of systemic risk. We believe that blockchain technology can provide a secure execution environment in which settlement is guaranteed by design. That is why today we are introducing a new formal contract language – Lira. This has the potential to open up and transform the derivatives market.”

At…

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eToroX launches new professional API trading program

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AlgoX Prime API introduced by blockchain subsidiary of eToro  

11 September 2019: eToroX, the blockchain subsidiary of global investment platform eToro, today announced the launch of its institutional-grade API trading programme, AlgoX Prime.

AlgoX Prime is the top-tier API program of eToroX Exchange, the eToro Group’s regulated and secure cryptoasset exchange. Employing the deep liquidity of eToro, tight spreads, and bespoke capabilities for cryptoasset trading, AlgoX Prime is carefully tailored to suit the needs and requirements of institutional-grade algorithmic traders from both the traditional and crypto spheres.

The program offers highly competitive fees, a free enterprise-grade market data package, and a high-quality, low-latency colocation service that incorporates professional-level connectivity, enabling direct access to eToroX’s dedicated, high-security data centre. The continuous and ongoing rollout will include an ever-expanding list of cryptoassets, increased volume from eToro, and much more.

From the Consensus invest:Asia event in Singapore, Doron Rosenblum, eToroX Managing Director, said “AlgoX Prime, our new API trading program, offers sophisticated trading capabilities to institutional and corporate traders. We believe that it will open the door for institutional traditional financial algo trading companies to trade cryptoassets, and by doing so, greatly increase market liquidity.” 

“The AlgoX Prime trading program aligns with eToro’s strategy of bridging the gap between blockchain and the traditional financial markets,” saidYoni Assia, CEO of eToro. “The ability to trade on eToroX using APIs will help…

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