RE: Sold my XRP? And The One Crypto I'd Hold This Month| Q&A #13
With regards to thinking in fiat or btc. I tend to think in terms of GBP as that is how I spend at present and I do not see it as a given that BTC will also be the ultimate store of value. Having said that the increased use of crypto credit/debit cards might change this in the future perhaps for some. Also all those noughts. Really! I would end up paying 100X what I thought I was paying.
We also need to be a little careful though not hedging into types of assets just in case there is a problem with internet or cryptos either legally or structurally. I would advocate that people use their full yearly shares ISA allowance where they can comfortably afford it and then use dividend compounding as in years to come the power of this is fantastic and also it will all be tax free and more importantly comparatively worry free. It also has long history of working (admittedly not as quickly as cryptos) and through many market crashes. If people start saving early enough then this method provides easily enough for their retirement plans without the gambling element of cryptos with the risk that that element could spill into other aspects of their lives. A brilliant tool to see the effect of compounding is https://www.dividendladder.com/tools/dividend-calculator/ . Plug your projected crypto profits into this and it is frightening.
Agree 100% with what you said about filling your yearly ISA allowance Dave! Will be making a video about this at some point before the end of the tax year.
Is this ISA allowance an European / Great Britain only? Thanks.
I think it is probably just GB but I have not looked into other countries' saving incentives. I am sure most countries probably have some form of tax free saving plan so maybe google that phrase with your home country. That is a part of the problem for people commenting on tax issues on forums as we are often all from different tax regimes but people might not take this into account when e.g. Louis or myself comment on crypto tax issues. It would be great for somebody with appropriate knowledge in each jurisdiction to set up a blog but I suspect that with 100 accountants you might still get 50 different answers especially with regards to crypto because it is so new and counter to general fiat methodologies. Caution is the best course at present I feel so perhaps have a ledger nano s with earmarked tax fund in relatively stable coin e.g. BTC/ETH/LTC which can be redeployed into "moon coins" if it turns out that you do not have to pay as much as you thought. Yes you might lose a little in the short term but you will still make far more than traditional savings or equities and also have the reassurance that you won't be caught out (so hopefully live longer to invest in crypto to compensate)
Funny that a lot of tax advice regarding crypto I have found is on steemit and bitcointalk. Not to say I fully follow those advice but crypto is so brand new that a typical tax accountant usually has no idea how to deal with cryptos. I hope this changes very soon. US is terrible now because the country just revised crypto investing that can not be deductible in 2018. That means every trade made if its a profit the profit will get taxed. Rough start to the new year for US crypto investors.