Hi,
In the tax year just gone I have made around £40,000 via gambling on crypto betting websites. £30,000 of this I have converted into GBP and withdrawn from my crypto wallet to my bank account.
Two questions:
1) Do I need to pay any CGT on this (my profits from the general appreciation of crypto is minimal - less than £500)
2) If I don’t need to pay tax due it being gambling winnings rather than crypto profit, how do I prove this. A lot of my betting accounts have been closed (and therefore I cannot login to them) thus making it hard for me to prove to HMRC that my transactions have come from gambling winnings.
Thanks
That is the mistake there in your first sentence.You have withdrawn from your crypto wallet to your bank account and didn't use an exchange for that so you would only transfer FIAT money to your bank account.I live in a country with really strong restriction to taxes from everywhere to everything but up until now they have not thought of taxing exchange withdrawals.As far as I know there is Cex.io which is a UK based exchange and you can easily use that to change your crypto to FIAT money before sending them to your bank account.This way only if your bank account becomes picky to ask you the source of such funds as you are already told there is nothing you can do.
Personally when I withdraw directly from a crypto wallet to my bank account I am taxed 15% here where I am but so far the bank never bothered to ask me where did I get the funds that I send to my VISA cards when I withdraw from the Cex exchange.It only says in the statement "Cex.io VISA refund money".
But probably if you send to your bank account that much of an amount it is a clear indication that you should at least provide evidence of the source of income,this rule is not only in UK but in most of the Western world.