Hi, here's the hypothetical situation:
- Company financial year ends in May
- Over the course of financial year the company paid £90,000 to director as a loan. Director paid interest to the company on the balance of the loan.
- In February director lent the company 15 bitcoins which were at the time worth £30,000 (£2,000 per BTC)
- By the end of FY BTC rate rose to £6,000, increasing the equivalent of the company's BTC debt to director to £90,000
- Hence by the end of FY directors loan account is zero (he owes 90,000 in GBP, company owes him 90,000 in BTC)
- Capital gains tax does not arise for director as bitcoins are never sold.
End result: company profits decreased by £60,000; director received £60,000 with almost zero tax. Interest payments are excluded for simplicity.
Am I mistaken anywhere?
Upd. Yes, I was mistaken. Profit does not decrease for the company as it will have BTC on its balance. However, by the end of FY the director has got 60K tax free. He has to pay the price though - and the price is the risk that bitcoin goes down. In that case he'll have to pay the price difference. Otherwise I have not yet seen a constructive version of why would any taxes arise in this setup.