Crypto tax dilemma

[7climber]

So a few years back I bought a few obscure crypto tokens and added them to the exchange's staking platform and kind of forgot about it. Recently I checked up and see that over time I was awarded a few other cryptos as part of the staking reward, which are now worth a small amount. I don't actually get the tokens until I click a 'cash out' button and receive them to my account.

The thing is, I can only cash out everything at once. That will include the original crypto that I staked which also included extra tokens for these, but this thing is dead and there is no market currently i.e. zero liquidity. There is a price floor and it's sitting at it, but no one is buying. If I cash out everything, am I liable for tax on these if there is no market for them?

I will of course owe income tax on the new tokens I got as part of the program, but that is fine as I can sell them. Does anyone know how Revenue would see this, i.e. you get awarded some crypto staking rewards that are on paper worth x but the market is dead so you can't sell them?

EDIT: The crypto is not dead exactly, the market is still open and the company are working to highlight it's utility and drum up interest again in the coming bull market. For now it has attractive staking rewards. It might be sellable in future, if enough interest and liquidity returns to the book.

 

[lilacrose]

@7climber It sounds like you can't even sell the tokens and it's a dead coin, scam, or rugpull. So it would be a tax write off for me

 

[7climber]

@lilacrose Normally I would think the same but that's the thing, it's not dead per se. The company are committed to it and are trying to revive interest, so potentially it might be sellable at some point in the future. Or it might not. Just not sure about the tax implications if I 'cash out' and actually get the tokens now. Don't want to write it off as the staking is working nicely and it could be worth 5 figures if could sell.

 

[rtjmrt]

@7climber I could be wrong, but you would only be liable(/tracable) for tax when it hits your bank account. Don't take my word for it, do your research.

 

[tony58]

@rtjmrt Why is it that so many people think that the money or assets don't exist if it only sits in an app?

 

[huynhtanan]

@tony58 CGT is paid when you collect said G - until then is "unrealised"

 

[tony58]

@huynhtanan Yes. And that includes when it's sitting in the app after a sale, not just when it goes from the app to your bank account.