REX is proud to announce a partnership with Charlton Baker, Crypto Tax experts from the UK. While this series of 5 articles specifically relates to UK tax law, parallels can be drawn with other jurisdictions. We believe it is important that investors are informed and that we have the tools and alliances to help us navigate complex tax regulations.
Welcome to part 5 of our UK Tax Series.
For easy reference check out the other parts below:
Part 1: Do I need to pay Taxes on my Crypto Profits in the UK?
Part 2: What Crypto Activity do I pay tax on in the UK?
Part 3: Am I taxed when my Rex stake comes to an end?
Part 4: Tax treatment of crypto staking rewards
Part 5: Do I pay taxes if I sell a stake?
Have you heard what’s at stake?
Rex provides its own native decentralised exchange for stakes, where you can offer your stake for sale! Wow.
But what happens when you sell a stake?
Well apart from getting your hands on the value of your staked Rex, it’s likely you are going to have to pay some tax in the UK. Not so wow.
HMRC will treat the sale of a stake as the disposal of an asset. The fact you have staked your Rex and sold it before the stake has ended does not mean it can be ignored for tax.
Selling a stake should be treated like any other disposal of crypto.
If you sell the stake for more than the cost of the Rex principal, you will need to pay capital gains tax in the UK on the profit. That’s 20% of your disposal proceeds off to the taxman. Always be sure to consider this before setting the price of your stake to be sold.
Your reward Rex earned will be sold within the stake.
Secret tip! If you sell your stake before it ends, you may be able to avoid paying income tax on your staking rewards! Now that’s almost as smart as Rex.
The Rex University and its Partners like Charlton Baker are here to help.
Check out www.charltonbaker.co.uk/news-blog and filter by cryptoassets for much more information and insights.