Staking and income classifications and Tax implication (UK)

I have read through a number of articles and forum posts about Staking and income classifications and Tax implication (UK) but am not 100% clear on some tax queries.

  1. I understand that if coins are staked then staking income is a taxable event. If those coins are then sold is the sale also taxed? How does that work?
    i.e. would staking be taxed twice, one when staked income received and again when a coin is sold?

  2. If stable coins are being lent on an exchange and interest is received this is classified as income.
    Is this income calculated as part of the Accointing software and included in the capital gains/losses tax calculation or does this income have to be declared separately like it would be for “standard income” like for a normal salary?

This is just my take on this - I’m not an accountant, and better answers may well follow (or correct me!).

  1. Staking incoming is just that - income, as such is taxed via income tax. If the coins are then sold, then if their value has changed, that may be relevant for capital gains tax (CGT).

e.g. you receive 1 DOT as a staking reward. This is worth ~£20, and you pay income tax on that.

If you later sell that 1 DOT, and DOT’s value is now £30, then that’s relevant with regards to CGT. you will have made a disposal of £30 with allowable costs of £20. (i.e. you’ll pay capital gains on your £10 profit).

If on the other hand, the price of DOT is still £20 when you sell it, then although you’ve made a disposal, there’s no profit so you’ll end up paying no CGT.

  1. This looks identical to the staking scenario as far as I can see. You’d pay income tax on the interest that you earnt, and then there would be a CGT implication on the profit/loss if you then sell the coins you’d gained.

Thanks for the input.
I ask these questions because in the Accointing Tax Report it only shows Net Capital Gain / Loss. It does not mention income anywhere.

So is this something that now has to be done manually as well and separate each “income” earned from staking as well as from income interest from stable coins?

If this is a yes it will be a nightmare to go through each item and get the correct price at the date stamp!!! I would expect this should be part of the Accointing tax report.

image

When I download the tax report, the first page of the PDF has an Income section, and for me, my 2020 looks like so…

These should hopefully correspond to transactions that I’ve classified as such (e.g. Airdrop should be all of the transactions I’ve classified from Coinbase earn, Mining is incoming transactions from ethermine, and staking income are staking rewards from Kraken/Coinbase).

I plan to add these figures together and submit them as extra income on my tax return.

(N.B. There’s also an “add_funds” figure that’s not shown, but I’ll of course ignore that since that’s just me depositing money on exchanges)

I can’t remember if Accointing does that classification of transactions automatically or I’ve manually classified them (I think I definitely had to for the mining, but it might’ve figured out the others on its own).

I believe that Accointing figures out the correct(ish) price for a coin at a particular time by getting prices from Coinmarketcap.

Thanks for the info. This is helpful.

I’ll have a look at my report and see what it says.

I looked at my report for 2021-2022 out of curiosity and it looks like this.

If you, the anyone else or someone for the Accointing team has some time, I have some questions:

  1. Assume this is the capital gains for the tax report?
  2. This gets added into extra income in tax return?
  3. This unclassified. What is the exact meaning? Does this mean it is a value that could be another category such as staking or income or airdrop etc etc. Are unclassified transactions essentially an unreconciled transaction and should these strictly be = zero?

Thank you!

Let me get our tax guy to take a look.


I understand that you have read these already, but I want to link them anyways :slight_smile:

Here is the breakdown of classifications: Crypto Tax Classifications : Accointing AG
Here is how you are taxed per classification: https://www.accointing.com/the-hub/?s=classifications&id=3300&post_type=post

That will be helpful. Look forward to the input of the tax guy…

I have a question, I am currently receiving staking rewards from a Liquidity Pool but the twist is the rewards are actually locked for 12 months, straddling the tax year ends.

From the above thread it would seem rewards from staking are potentially taxed twice (Income from the reward event and then potential CGT once disposed) however, the fact my rewards are locked I could be asked to pay Income Tax on rewards I actually do not have access to.

Would I only declare these are rewards received once they are unlocked and I actually have access to them?

Please see here how to staking:

Here is a video:

This doesn’t really answer my question which was specifically to do with the concept of staking rewards that are locked for periods of time.

So whilst I have earned the reward I do not have access to it, therefore, should I pay tax on an asset I actually will only receive at a future date. My initial thoughts are I would treat the unlock periods as the dates in Accointing as the dates I received the lump sum of staking rewards because only at that point I took possession of the staked reward.

Personally, I would not report the income from the staking rewards until you have control/access to them. Once you have access to these coins/tokens then include them in income based on FMV at that time. Once you dispose of those, capital gains, your basis is the income you included. So if the coins/tokens don’t go up in value from when you have access to them, you don’t pay tax, you only pay tax on the appreciation.


So this is a weird case as the laws are not specific in this area, though I am unsure of your country as well. Therefore it is up to the user to classify as they want depending on how they chose to treat this kind of transaction. For example, with loans, the collateral should not be taxable, therefore, it should be an internal transfer as if it was staking, but the keyword is should. if someone wants to be super conservative they could do it as a trade. Similar to a LP, you can treat as a deposit or taxable event, or as if you are staking.

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@chemicallymark as for your photo:

  1. Yes
  2. Yes
  3. Please check review settings - must have unclassified transactions.
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Thanks @Matt . Will have to go through all the transactions again and try and eliminate unclassified transactions…sigh

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Does anyone know what the fields below refer to?

Are these related to calculations from Accointing software or are the specific fields in a UK tax form?

I looked at a tax return form from a previous year but none of the fields match the field numbers in the Accointing summary report.

Any ideas?

Thanks.

This should answer your question:
How to File Your Crypto Taxes with ACCOINTING

Let me know if I am good to close the post.


If you need help from an official member of Accointing, please create a ticket here.
The community board is for community to help each other :slight_smile:

Thanks Matt. This article seemed very USA centric and did not really clarify the sections on the screenshot I was trying to find out about.

I tried looking through the following items but they did not really help. They are too general.

Is there another source that explains the fields in the tax report?

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We are working on more articles like the one I posted for the USA. Sorry, I did not realize this post was geared more towards the UK.

What tax do questions remain unanswered? I can get our UK guy to answer them.

also:


  • If you would like to get help from another person in the community, please ask in our Discord.

  • If you would like to get support from an official member of the team, please create a ticket.


  • Wenn du Hilfe von einer anderen Person aus der Community erhalten möchtest, frage bitte in unserem Discord.

  • Wenn du Unterstützung von einem offiziellen Teammitglied erhalten möchtest, erstelle bitte ein Ticket.

Thanks Matt.

A bit earlier in the thread you confirmed that field #21 was for the capital gains / loss bit for the report.

I’m trying to understand the relevance of each of the other items in this list, which each have a “field #”. I’m not sure if this is something specific that has to be filled out on a UK tax form or where this information should be applied. Or if the field number is something specific to the Accointing form.

I could not see any matching fields for the times in the report vs. a tax form.