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When buying bitcoin turns you into a trader

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For most of us, the image of a trader is someone sitting in a busy stock exchange, looking stressed out and sweaty or with their head in their hands as the market crashes.

Or, they could be pacing up and down your high street bellowing “Buy! Buy!” or “Sell! Sell!” into a mobile phone, making sure everyone hears them.

But have you considered that you could also be a trader? If you have been buying Bitcoin, Litecoin or any of the others with the specific intent of selling when it rises, only to buy it again when it falls, in the eyes of some fairly important people, you might be classed as a trader.


Your capital is at risk.

These fairly important people are Her Majesty’s Revenue and Customs, and if they suspect you are trading cryptoassets, there might be taxes to pay.

Unlike long-term investments, which the government actually likes as it ties in capital into supporting companies, currencies and other projects it doesn’t want to spend the money to do, trading is treated differently.

Trading attracts Income Tax, which is additional to what you pay on your regular earnings. HMRC doesn’t like people earning extra cash – digital, traditional or otherwise – and not telling it, so it could be worth checking up before you file your tax return. Just like your regular income tax though, you are able to offset it against some losses.

The good news is that HMRC has set the bar quite high. You would have to make lots of trades every day for the authorities to think you’re setting up shop as the next Barclays or Goldman Sachs.

However, if HMRC deems you to not be a trader, you don’t get off the hook for your dues. Applicable to UK taxpayers, Capital Gains Tax is due on all profit made from investments and assets that grow in value, is still due to be paid… and no, the Exchequer does not accept Bitcoin.

As cryptos are fairly new – to the powers that be, at least – there are few rules and regulations so far set in place. But it is important to note that these will be tightened up over the coming years and months as they become more mainstream, so keep an eye out for updates.

Check out eToro’s crypto tax calculator to see if you owe tax on crypto.

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.

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Stellar now available on eToroX exchange

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eToroX announces new cryptoasset and multiple fiat pairs

7 August 2019: eToroX, the blockchain subsidiary of global investment platform eToro, today announces that Stellar (XLM) is now available on the eToroX exchange.

As of today, eToroX is making Stellar a base currency for trading pairs on eToroX. It will be tradeable against other cryptoassets and stablecoins. The pairs include USD (XLM-USDEX) GBP (XLM-GBPX), Japanese Yen (XLM-JPYX), Euro (XLM-EURX), and with Bitcoin (BTC-XLM), and Ethereum (ETH-XLM).

“We want to open up the tokenized world for everyone,” said Doron Rosenblum, Managing Director of eToroX. “eToroX is bringing crypto and tokenized assets to a wider audience and enabling them to trade with confidence on a secure and regulated platform.”

“We believe that blockchain technology has the means to include more people in a new financial world, who might have been previously excluded from it. Stellar shares this ethos, which is why we are excited to be adding it to our exchange and on-chain wallet for people to buy, sell and hold, 24/7.”

Stellar is an open source and decentralized payment network protocol with its own currency (XLM), which connects banks, payment systems and people, aiming to provide global access to low-cost financial services for all.

“It’s exciting that eToro has added Stellar Lumens as a base currency on the eToroX exchange,” said Jed McCaleb, CTO of the Stellar Development Foundation. “We believe…

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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.

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.

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…

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Making the most of your bitcoin (by maxing your tax)

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Crypto enthusiasts will know that just because you didn’t know about the tax liable on cryptocurrency gains doesn’t mean you don’t have to pay it. Ignorance is no defence against the taxman.

But there are ways of reducing the tax you have to pay, and they are all entirely legal.

The main tax a holder of bitcoin is most likely to pay is on any gains made when selling the asset. This is called Capital Gains Tax (CGT). Like any investment, if you don’t do anything to make the value increase, it’s seen as something of a windfall – and the government wants a share of the action.

You are liable for tax on the gains you make selling cryptoassets for cold hard cash, exchanging cryptoassets for a different type (i.e. bitcoin for ripple), using cryptoassets to pay for goods or services or giving them away to someone else.

Importantly, you can give the cryptos to a spouse or civil partner and not be liable for gains… but you are just handing over the liability to them to sort out.

Also, don’t think you can just offload them onto a charity, as HMRC can take a view that you are doing it just to get out of paying what you owe.

However, CGT only kicks in after you’ve made…

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