Buying a flat with bitcoin

Etienne Wong

Sarah Squires

Question

My client Bob (domiciled and tax-resident in the UK) decided in September 2017 to invest in a property development in Dubai. The unique selling point of the development was that completed homes valued in US dollars would be sold (only) for bitcoin. The value of a two-bedroom apartment was (and remains) $350 000. In September 2017 one bitcoin translated into $4 375 which meant (assuming the exchange rate remained the same) the price for the apartment would be 80 bitcoins. Bob bought 80 bitcoins in 2017 for £280 000. The development has yet to complete. In early 2018 one bitcoin translates into $15 217. At this exchange rate the price of the apartment would be 23 (and not 80) bitcoins. My questions are:

(1) How will Bob be taxed on buying the apartment?
(2) If he ends up holding...

If you are not a subscriber, subscribe now to read this content.

If you are already a subscriber, sign in

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this article in full.