Finance
The hidden cryptocurrency investing risk no-one is talking about
Bitcoin and other cryptocurrencies have been back in the spotlight, after soaring on the back of Donald Trump’s election, then plummeting back down again before getting another boost when the president fleshed out some details about a proposed US crypto reserve.
The risk of dramatic ups and downs in the market are well known, and investors shouldn’t get into it without realising they could lose everything.
However, it’s not the only risk to be aware of – because even if you make money on crypto, you could be felled by tax.
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If you earned the crypto through work, or made it by mining it, then you could be in the frame for income tax. But if you bought it, the tax to worry about is capital gains tax (CGT).
You’ll need to work out what gain you’ve made. You can pool the cost of the coins you’re selling (assuming they are the same type of coins), considering what you paid for each of them, and then working out an average cost per coin.
Then you can work out the gain by subtracting that from the selling price. It means you need to be certain about what you paid for the coins and how much they have gained in value since then.
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You then need to either pay the capital gains tax immediately, using the real time service, or complete a self-assessment tax return at the end of the tax year.
You might not have to pay tax on all of the gain. If some of the coins you’re disposing of have lost value, you can offset the loss against any gains, but you need to report the loss to HMRC in order to do so.
You can also often subtract the transaction fees – which can be substantial when you sell crypto.
All this means you need to keep good records – including the date of disposal, the pooled costs before and after you disposed of them, the number of tokens you have left, and the value of them. You also need to hang onto bank statements and wallet addresses, because HMRC might ask to see any of these things if they carry out a check on your accounts.
Don’t assume your wallet will be the only record you need, because this isn’t necessarily stored for long. The exchange may not even exist when HMRC comes calling.
To some people this may sound like a real faff, and they may wonder whether they need to bother at all, so it’s worth knowing that HMRC works with the major exchanges and can access your customer information and transaction data.
The autumn budget last year also revealed HMRC would be keeping a closer eye on digital assets. Worldwide crypto activity from the start of 2026 will be reported automatically to the taxman – with the first reports hitting at the end of May 2027.
Finance
Aussie lawyer warns of ‘middle class’ family battles after budget introduces ‘backdoor death tax’
Australians are expected to pass on trillions of dollars in assets in the coming years as the grey tsunami of wealthy baby boomers crashes across the economy. But some of those expecting the windfall could be more likely to find themselves in a potential dispute with their loved ones as tax changes introduced to trusts commonly used in estate planning increase the likelihood of conflict.
Lawyers who deal with contested wills and estates foresee issues of conflict more likely to arise if the proposed changes go ahead. Alun Hill is the national director of the contested estates division of Armstrong Legal and believes there will be more reasons for discontent and for wills to be challenged due to the increased tax take being slipped in.
“It widens the battleground,” he told Yahoo Finance. “It just creates more reason why there might be someone who wants to contest a will.”
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Under the changes in Labor’s controversial budget, the unprecedented 30 per cent minimum level of capital gains tax will apply to the most common form of estate planning trust, known as a the testamentary discretionary trust.
While the government says its legislation pertaining to tax changes for trusts will be brought before parliament later this year, the slated changes would come into effect from July 1, 2028, and only specifically exclude fixed testamentary trusts. Fixed trusts are different from discretionary trusts as trustees don’t have the discretion to change the proportion of income a beneficiary is entitled to.
“Discretionary trusts aren’t just used as a tax minimisation vehicle,” Hill said. “Traditionally they’ve been used to provide the trustee with the ability to do what’s necessary to carry out the intentions of the testator (the person who wrote the will).”
While the finer details remain to be seen, the new tax floor regardless of the income of beneficiaries and the overall higher CGT on assets, will mean beneficiaries will see less passed on than previously expected – and that can be grounds for a challenge.
“What this really does is create the potential for claims being made against the estate by the spouse or by whoever the intended beneficiary is, who is no longer receiving adequate provision or appropriate provision under the testamentary trust,” Hill said.
A charity has announced its new chair following the retirement of its founder.
Peter Neville worked for more than five years to set up Guernsey Community Savings, which first opened its doors in September 2020 to support people who were not able to access mainstream banking, staff said.
Former banker James Ellis is taking over the role. Neville said: “James brings exactly the right blend of financial services experience, charitable involvement and community understanding.”
The charity had helped about 200 people, who would otherwise have been excluded from the financial system access, to accounts and linked debit cards, and offered money‑management guidance to many more, staff said.
Neville said: “The initiatives now being discussed, together with the additional features offered by the new money‑transmission platform, reassure me that James’s vision aligns perfectly with the aims we set in those early days.
“I wish the board and GCS staff every success as they take the charity forward.”
Ellis said: “‘The creation of Guernsey Community Savings in 2020 was only possible because of Peter’s unique set of qualities that enabled him to create a talented team and the structure to tackle the issues facing the financially excluded in our island.
“I was delighted when he asked me to continue with his work and further expand his vision, which I share, to provide help in the form of bank accounts, debit cards and financial education and to realise our ambition to provide grants and soft loans where needed.”
He added he was pleased Neville agreed to remain involved with the charity as life president.
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Hong Kong’s first five-year plan will map out concrete paths to address the city’s shortcomings and magnify socio-economic benefits, including how artificial intelligence can create quality jobs, the financial chief has said a day ahead of the public consultation on the blueprint.
Financial Secretary Paul Chan Mo-po said on Sunday that the key task for the blueprint would be the upgrading and transformation of the city’s economy, vowing to press ahead with the Northern Metropolis megaproject and make it a “spatial carrier for deploying emerging and future industries”.
“Hong Kong’s five-year plan aims not only to provide greater momentum for economic development and better application of technology, but also to promote more inclusive and equitable development in society, provide residents with more quality employment opportunities, and create a better life,” he said in his weekly blog.
The efforts to formulate Hong Kong’s first five-year plan are led by Chief Executive John Lee Ka-chiu, and the blueprint is expected to be finalised by the end of 2026.
Lee said last week that the public consultation for the outline would begin on Monday, confirming an earlier South China Morning Post report.
The public can submit views via dedicated websites during the two-month period, and the government would hold multiple sessions to gather input from various sectors, including lawmakers and industry representatives.
The blueprint aims at aligning Hong Kong’s development with China’s 15th five-year plan, which positions the city as an international hub for finance, shipping, trading, innovation and technology, offshore yuan and global talent.
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