Buying Bitcoin long term


To be updated

Prior to October 2020

As a UK resident the best way to purchase bitcoins I believe could be through your pension, this enables the gains you may make to be free of UK capital gains tax.

2020 update: FCA currently is blocking ETNs which they estimate will block £53M going into UK SIPP pensions. From January 2021

If you are a higher rate tax payer and can use your full allowance you can carry forward unused pension allowance for 3 years.

As non tax payer you can even put in up £2,800 per annum, then HMRC tops that up to £3,600, yes that’s another 20% towards your bitcoin fund!

Remember this is pro-rota for what ever, you are self-employed – just dig out those SA302 letters you’ve filed away like a demented squirrel. They are flat packed gift horses in your folder!

Presently the only way of doing this I know is via Hargreaves Lansdown – via these investment vehicles:

Bitcoin Investment Trust

XBT Provider AB Bitcoin Tracker EUR

XBT Provider AB Bitcoin Tracker One

You just ring’em up, get the Vantage SIPP form (Self Invested Personal Pension)
or apply on-line

Can I contribute to a Vantage SIPP alongside other pensions? (From their FAQ)
Yes you can. Although you should be aware of your personal contribution limits and the annual and lifetime allowances.
Before applying, please understand the risks and features of the Vantage SIPP.

Do read disclaimers, take financial advice etc, etc etc.

You already have a pension?

But you “could” also choose to take some money out of one pension pot that’s probably going nowhere and pop it into the Hargreaves Lansdown Vantage SIPP

Exiting your SIPP

OK. So having escaped capital gains which Bitcoin profit is normally subject to passed the grand old age of 55.

You can current take one 25% draw down tax free, then subsequently any future draw downs will be subject to income tax. But you will of course have your tax free personal allowance available to you.

January 2018 update

It maybe that SelfTrade also offer the same ability to invest in the XBT fund via their SIPP but I’ve not been able to reach them on the phone, which is not a great start to research.

I find their fee structure mind boggling and it looks like the may charge 0.50% of trade value on top of their small dealing fees. (Additional charge for overseas securities).
(I think)

DISCLAIMER: I am not a financial advisor, I do not get a kick back from Hargreaves Lansdown, I am just a customer. If know of other pension vehicles in the UK that come to market please do let me know.

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