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For a while now I have been mining and have now got 5 Bitcoin which I'm ecstatic about as it means once I have the money for it, I'll be £13k richer and can put a deposit down on a house.

Whilst I can mine and know how to sell the Bitcoin, I don't know how I'd do these legally.

If I simply just sell them, surely I'd need to put tax on them or something to comply with UK tax laws?

If I was to use the money to put a deposit down, they're going to want to know where the money has come from and whether it's legal money and no doubt the bank will go through my accounts very precisely.

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    Spend some of your newfound wealth on a consultation with an accountant. – Nate Eldredge Feb 14 at 18:30
  • One issue with using it or a mortgage deposit, is banks tend to view your act of saving of the deposit as evidence that you have the means to pay back the monthly mortgage payments. If you suddenly come across wealth but have not demonstrated an ability to save money on a monthly basis, the bank won't necessarily see you as being able to pay back a mortgage. Perhaps the correct thing to do would be to cash it in once a month as if it were a wage, and then attempt to use it as your mortgage deposit in 12 to 18 months. – Mark H Feb 15 at 1:06
  • Also, I think earnings from Bitcoin come under capital gains in the UK, which means they'll be taxed as part of your income depending on how much you earned in total. Check the information available on the gov.uk website. – Mark H Feb 15 at 1:08
  • Mark H, thanks for the advice. I am able to afford a mortgage easily and have also been saving from when I earn from my job. I have an amazing credit score, no debt and a highly paid job so I imagine I'll be accepted no problem, in fact I already have a few offers. I'd just hate to be open to getting fined or jailed for tax evasion or something. – Ember Feb 15 at 9:43
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Bitcoin acquired through mining are treated as income and subject to Income Tax at the appropriate rate (perhaps 40% if you also have a highly paid job). You'll need to declare this income in sterling equivalent. I believe you'll also be subject to NI contributions on those Bitcoin earnings.

If earned Bitcoins subsequently increase in value, I suspect the increase will be subject to Capital Gains Tax.

As others have said, employing a qualified accountant would be a sensible action.


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