Disclaimer: This article is intended as an informative piece. This is not accounting or tax advice. Please speak to a qualified tax professional about your specific circumstances before acting upon any of the information in this article.
Please note that the Celsius bankruptcy tool has only been designed to work with UK tax calculations.
Our Celsius bankruptcy tool enables you to generate a tax write-off within Recap aligned with key principles of exchanging contractual rights. This tool has been developed after months of collaboration with our accountant partners Andersen LLP and the CryptoUK working group.
We strongly recommend using these features in collaboration with your tax advisor. You can seamlessly invite your accountant or advisor into your Recap portfolio using our agent sharing feature.
For a detailed explanation of each setting, please see below.
Beneficial ownership transfer date
The Beneficial Ownership Transfer Date marks when ownership of your assets was transferred to Celsius.
This setting triggers the disposal of your assets in exchange for asset rights and can potentially result in significant taxable gains or losses, depending on the acquisition costs of your assets.
By default, this date corresponds to when Celsius updated their terms. However, it's essential to determine when you believe Celsius became the beneficial owner of your cryptocurrency.
Write-off date
The Write-Off Date for all remaining exchange rights is the date when these rights are considered worthless. By default, this is set to the date when Celsius officially filed for bankruptcy.
It is for you to decide when it became evident that Celsius could no longer meet its obligations to return your assets.
This decision will write down the contractual rights to zero, resulting in a realised tax loss. It's up to you to determine if this should be claimed through a negative value claim.
Loan collateral disposal treatment
This setting determines when loan collateral is exchanged for a loan collateral right.
On Deposit: If you consider the disposal of beneficial ownership to occur when you deposited the collateral for the loan
Beneficial Ownership Transfer Date: If you consider the disposal occurred at the same time as the previously set Beneficial ownership transfer date
Depending on the acquisition costs, this could result in substantial taxable gains or losses, so make sure to carefully evaluate and decide based on your specific situation
Distributions
Please enter the distributions you received as part of the bankruptcy process. For each distribution, include the following details:
Date
Amount
Asset
Price
Valuation in GBP
By default, we use the valuation prices agreed upon in the bankruptcy reorganisation plan, effective January 31, 2024.
The value of these distributions is treated as chargeable gains. Each distribution will be considered a disposal for Capital Gains Tax (CGT) purposes, resulting in a taxable gain.
Clawbacks
Please enter the amounts of BTC, ETH, and Shares you have paid as part of a clawback. For each payment, include the following details:
Date
Amount
Asset
The value of these payments is treated as chargeable losses and may offset any distribution proceeds.