r/BitcoinUK

Interesting situation just happened,my mobile has been turned off today and an old friend knocked on my door whom i havent seen in a few years, back in 2018 I had helped him set up an exodus wallet and he bought about 17K of crypto.

I invited him in as he had told me his BTC had gone from his wallet, he then got his laptop from the car and his wife came in with him, he logged on to my wifi opened his wallet and sure enough nearly 2 BTC had been taken in 2024 as I closed some of the tabs he had open i came across a piece of paper that he had hand written his seed phrases on, obviously to say I was shocked was an understatement.

I then asked him if he had ever had a virus on his laptop to which he replied yes several times and then went on to tell me he had taken his laptop in to a few high street computer shops to have this fixed, I can only imagine how shocked whom ever took his crypto that his seed phrase was in a folder on his desktop!!!!!!

I just wanted to relay that there are some very naive people still out there, I am absolutely gutted for him but reminded him that all he has really lost is the initial investment of 17k, I think this gave him a modicum of comfort but I can only imagine the grief his wife gave him when he left mine.

Hopefully the scumbag that took his crypto gets what they deserve cut talk about a schoolboy error!

Something that probably doesn’t get talked about enough in crypto…

What happens to your crypto if you get divorced?

In England and Wales, crypto can form part of the assets considered during a divorce settlement, just like property, savings and investments.

That means Bitcoin sitting in cold storage, Ethereum on an exchange, DeFi positions, NFTs and other digital assets may all need to be disclosed.

And this is where crypto can make things considerably more complicated.

Unlike a traditional investment account, you could have:

• Multiple wallets and exchanges
• Assets spread across different blockchains
• DeFi positions
• Staked assets
• Tokens with limited liquidity
• Years of transactions affecting the tax cost basis
• Huge fluctuations in value between disclosure and settlement

There’s also the question of tax.

Simply agreeing that one person keeps £100,000 of crypto while the other takes £100,000 of another asset doesn't necessarily mean those assets have the same real value.

Why?

Because that £100,000 crypto portfolio could be sitting on a significant unrealised capital gain.

Special Capital Gains Tax rules apply when assets are transferred between separating spouses or civil partners. Since April 2023, no-gain/no-loss treatment can generally continue for up to three tax years after the tax year in which the couple separated, and transfers made under a formal divorce or separation agreement can also qualify.

But no gain/no loss doesn't mean the gain disappears.

The recipient generally inherits the historic acquisition cost, meaning that embedded gain may become relevant when they eventually dispose of the asset.

So if crypto forms part of a divorce settlement, I'd want three things properly understood:

What crypto actually exists.
What is it genuinely worth.
And what tax liability is sitting behind it.

Crypto might be digital.

The divorce — and the tax consequences — are very real.

Is this real? Or just colloquial? If somebody mixes their coins is there any way to distinguish from “normal” BTC?

Had a conversation with another accountant about crypto tax today…

Accountant: “I use Koinly for crypto CGT disclosures on Self Assessment. It’s super simple really — basically the same as getting a GIA report for investments.”

Me: “Hmm… I wouldn’t say it’s quite the same. Koinly and other crypto consolidation tools can be wrong if the data hasn’t been properly reconciled.”

Accountant: “I’ve always found Koinly accurate.”

Me: “Interesting, because it’s actually one of the platforms I often have to do the most work on to reconcile properly.”

Accountant: “I did a full analysis and it was accurate.”

Me: “Did you reconcile it?”

Accountant: “Yes.”

Me: “Back to the exchange and wallet data?”

Accountant: “No.”

Me: “What did you reconcile it to?”

Accountant: “To itself.”

Me: 🤦🏾‍♀️🤦🏾‍♀️🤦🏾‍♀️

And therein lies the problem.

If you reconcile Koinly… to Koinly, you haven’t independently checked whether Koinly is right.

Crypto tax software is incredibly useful, but it only works with the information it has pulled in and the way it has interpreted that information.

APIs can miss transactions. Transfers can be misclassified. Wallets can be missing. DeFi transactions can be interpreted incorrectly. Cost bases can be affected by incomplete history.

A report looking internally consistent does not necessarily mean the underlying data is complete.

For me, reconciliation means going back to the actual exchanges, wallets and blockchain activity and making sure what is sitting in the tax software reflects what really happened.

That’s why I really don’t think a Koinly report should be treated in the same way as a GIA tax report from an investment platform.

Koinly is a tool.

A very useful tool.

But it isn’t the audit evidence for its own output. 😂

Hi. What swap do you guys currently use? Many of what I used went down. I need something with no kyc and reasonable fees. I need to on a weekly basis swap some ethereum to bitcoin, so the lower the fees the better.

Alright, let's talk about the recent BIP-110 situation. Everyone is treating this like another endless thread about whether JPEGs belong on Bitcoin or whether Luke Dashjr has gone rogue. But honestly? The technical side is almost secondary at this point.

What's actually wild is what this whole event exposed about how Bitcoin decision-making works right now.

Looking at both sides, everyone seems to have a point:

Why proponents pushed for it:

• Node operators are the ones storing the chain forever, but miners are getting paid all the short-term fees for high-data transactions.
• Many felt Core developers changed default relay policies over time without actual consensus, and BIP-110 was an attempt to force the node client back to stricter relay defaults.
• The argument that letting Bitcoin turn into a generic data layer compromises its primary function as censorship-resistant sound money.

Why opponents shut it down:

• Deciding what counts as "spam" vs. "legitimate financial data" is a slippery slope toward subjective censorship.
• Trying to push a soft fork without broad miner support was a massive game-theory risk that could have fragmented the network.
• Trying to filter data usually backfires, people just hide data in standard script fields, which makes UTXO bloat even worse.

The bigger issue isn't even whether BIP-110 was good or bad code. It's the governance dynamic.

If Core maintainers set the default client rules, miners choose what blocks to build based on immediate profit, and node operators are left trying to coordinate soft-fork signalling when they don't like the direction, who is actually calling the shots in Bitcoin today?

Did we just watch decentralisation work as intended because a non-consensus proposal died out, or are node operators slowly losing their seat at the table to miners and maintainers?

Curious how you guys see it.

Crypto tax software is not something to avoid.

Used properly, it can be incredibly useful.

It works particularly well when:

• You have complete transaction records
• All wallets and exchanges are connected
• Your activity is relatively straightforward
• Transfers between your own wallets are correctly matched
• Missing purchase histories have been resolved
• Income transactions have been reviewed
• Duplicate entries have been removed
• The final figures have been reconciled

These platforms can help you:

• Bring transactions into one place
• Calculate gains and losses
• Apply UK pooling rules
• Identify missing data
• Review holdings across different wallets
• Prepare tax reports more efficiently
• Maintain clearer records for future years

The issue is not the software itself.

The issue is treating the first report it generates as the finished answer.

Crypto tax software is most effective when it is used as part of a wider review and reconciliation process.

Good software plus accurate data and informed review can produce a reliable result.

Software without those checks can simply calculate the wrong answer more quickly.

Hi, I am interested in selling some of my supercars/performance cars for Bitcoin. Asked a few car dealers but they said they couldn’t pay in Bitcoin. Could someone point me in the right direction?

Thanks