How to calculate your crypto cost basis methods; HMRC Policy

How do you calculate the cost basis for cryptocurrency? When it comes to crypto cost basis methods, the HMRC has strict policies regarding this, known as share pooling. This exists to avoid crypto investors from taking advantage which could lead to unlikely gains and losses.

Here are the three methods to find out your cost basis:

• Same-Day Rule – This is applicable to coins that are bought and sold on the same day. If you decide to sell more than the coins bought on that same day, you need to follow the Bed and Breakfasting Rule.

• Bed and Breakfast Rule – This is applicable to coins that are bought and sold within a 30-day period. If you decide to sell more than the coins bought within this 30-day period, then you need to follow the Section 104 Rule.

• Section 104 Rule – This is applicable if the first two rules, Same-Day Rule and Bed, and Breakfast Rule, do not apply. For this, you basically have to calculate an average cost basis. This is done by totaling up the amount paid for all your crypto assets and dividing it by the full amount of coins or tokens held.

This, of course, can be quite confusing for both individuals and companies. Therefore, Crypto Accountants in the UK have taken the responsibility upon themselves to be the crypto tax expert you need.

To contact us, visit our website at: https://www.cryptoaccountants.live/