Staking and HMRC tax treatment
Posted: January 7th, 2023, 1:28 pm
I'm a bit perplexed by staking and the tax treatment - in particular what happens when you unstake.
I think the situation is:
- At the point you decide to stake = a disposal event which needs to be considered for CGT
- Anything you earn whilst staking = income to be reported as interest
What happens when you later unstake? Is that then considered another disposal event, and any gain/loss on tokens from the start of staking would be subject to CGT again (including the original starting balance)
It seems odd to have anything considered as interest given the coin might crash in value so you'd never actually receive the amount of 'interest' received, and you'd then also be paying CGT as well for the same transaction?
Or is there no additional CGT for the staking period and the unstaking just becomes a new acquisition date and value for CGT going forward?
I think the situation is:
- At the point you decide to stake = a disposal event which needs to be considered for CGT
- Anything you earn whilst staking = income to be reported as interest
What happens when you later unstake? Is that then considered another disposal event, and any gain/loss on tokens from the start of staking would be subject to CGT again (including the original starting balance)
It seems odd to have anything considered as interest given the coin might crash in value so you'd never actually receive the amount of 'interest' received, and you'd then also be paying CGT as well for the same transaction?
Or is there no additional CGT for the staking period and the unstaking just becomes a new acquisition date and value for CGT going forward?