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Disposal proceeds
It is vital to identify the correct disposal proceeds in sterling for each disposal made and it is not always as straightforward as you might think.
Disposals made to a connected party (other than a spouse/civil partner) are deemed to be made at market value. Any actual consideration (e.g. payment) given by the connected party for the cryptoasset is ignored. Instead, the disposal proceeds used in the capital gains calculation is the market value of the cryptoasset disposed of, at the date of disposal. Losses can only be used against gains to the same connected person.
Even where two parties in a transaction are not ‘connected’, the deemed proceeds will be market value where there has been a gift or where the recipient has paid less than market value. The market value of the cryptoasset at the date of disposal needs to replace the actual proceeds received by the seller in the capital gains calculation.
The exception is where the gift is to a spouse or civil partner, for which there are special inter-spouse transfer rules instead.
Disposals to a spouse or civil partners are usually treated as made with no gain and no loss, but often still need to be reported on the Tax Return. The disposal proceeds are deemed to equal the allowable costs. There are however certain restrictions, including when a couple has separated, detailed guidance should be considered and can be found at the following link...
Relief from capital gains tax is given in respect of disposals of cryptoassets to a UK, EU or EEA charity, a community amateur sports club (CASC), or to a body for a National Purpose (e.g. The British Museum).
When the recipient pays no more than the CGT allowable costs for the cryptoasset and it is not a tainted donation, the disposal is treated as being made for no gain and no loss. Therefore the disposal proceeds are deemed to equal the allowable costs. For more information on relief from gifts to charity and to find out what is a tainted donation, click here...
Last modified 1yr ago