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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4985
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have kept a UK address and a UK bank account last

Resolved Question:

I have kept a UK address and a UK bank account for the last 3 years. However, I have not been in the UK in total for more than one month in the last 3 years, spending most of the time in South America, Ecuador. In the 2013-2014 tax year I have not earned a penny, thus have no yearly P35 and no income whatsoever from the UK. Yet, I was still listed as a company director so HMRC expects me to fill out the self return.
In that tax year, I made some income in different countries that I am unsure whether it needs to be reported as it also involved using my UK bank account, there are two scenarios.
I was living in Ecuador and I made close to £17000 by speculating on-line on bitcoin markets. I withdrew all he money to my UK bank account because i owed tax from 2012, so although I was not in the UK, all this money went to my UK bank account by selling the bitcoins I speculated on to UK individuals via our personal bank accounts. Now, HMRC ruled that there is no VAT due on this, I know (https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies), but do I have to pay capital gains tax on this in the UK?
I took part in a bit of arbitrage between the UK and german bitcoin markets. Eg, purchased a bitcoin for 100 euros but sold it for 100 pounds. Reused the profits to do this again. Is there tax due on: total profits - total purchases? Is there a threshold of sales before I have to pay tax from something like this? It was not a lot.
Thanks for any help you may be able to provide.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

If you have received a notice to file a tax return then you must file it as failure to do that would result in a fixed penalty of £100. You should file a tax return albeit as a NIL return.

I am not sure if you filed a P85 form when you left the UK. Filing of this enables HMRC to update their records and get your tax right. You can find more information on Form P85 here

https://www.gov.uk/government/publications/income-tax-leaving-the-uk-getting-your-tax-right-p85

You state "I was living in Ecuador and I made close to £17000 by speculating on-line on bitcoin markets. I withdrew all he money to my UK bank account because i owed tax from 2012, so although I was not in the UK, all this money went to my UK bank account by selling the bitcoins I speculated on to UK individuals via our personal bank accounts."

If you are non-resident in UK for tax purposes throughout the tax year then any gains you make from investments in that year are not chargeable to CGT in the UK. You say you have been out of the country for the last 3 years and if the buying and selling of bitcoins took place whilst you were non-resident then the gains are not subject to CGT.

It is your residence status and not where the bank account is held that determines whether a gain is chargeable to CGT or not.

More information on this can be found here - look at Q4

http://webarchive.nationalarchives.gov.uk/20140109143644/http://www.hmrc.gov.uk/cnr/faqs_capgains.htm

There is some useful information of HMRC helpsheet hs278 "temporary non-residents and capital gains tax" here

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/323665/hs278.pdf

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

taxadvisor.uk and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

I have yet to finish reading all the links you posted as they are quite long, but just 3 quick questions so that I can properly formulate an understanding.

1. Since CGT occured outside UK, I can simply file a NIL return, correct?
2. I have to fill out a P85 form now.

3. Arbitrage gains are handled as capital gains tax also?

Thank you

-David

Expert:  taxadvisor.uk replied 2 years ago.
David, thank you for your reply.

The answer to all three is Yes

I hope this is helpful and answers your question.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.
I thank you for accepting my answer.

Best wishes.