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.

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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.