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Suppose I do some work as a freelancer in exchange for Ether tokens, but I do not sell them right away. I hold them for a while, but eventually dispose of them within the same UK tax year.

  1. Do I have to pay Income Tax and National Insurance based on the market value of the Ether tokens at the time of receiving them, or when I billed the client?
  2. I assume I have to pay Capital Gains tax if I sell the tokens later and realise a gain, but how should I calculate my cost basis?
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    I think this is correct: For (1) I think it would be at the time of receipt because you were paid that cash and have a txHash to prove it. But you might want to change your tac and let your customer know that you'd want £X worth of ETH on the day of payment. Otherwise you might get nothing - crypto is volatile ! For (2) your cost basis would be the value of GBP of the ETH on day of receipt, again provable by txHash.
    – user20748
    Dec 5, 2021 at 11:55

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