|>>|| No. 6999
For fuck's sake. I typed out a huge response to this, and it got lost due to tiredness on my part. So I'll try and recap.
1/ Pay your taxes
2/ I didn't and haven't ever evaded the taxman, and that's the God's honest truth. I own next to no bitcoin, and never have; I mined a few altcoins after the Gox boom with my GPU and converted most to Bitcoin, but it was just pocket change. You're welcome to change that, you lucky bastard (6627c5ce). How did you get them in the first place, early miner?
3/ Evading taxes (and I want to make it clear I don't condone this and what follows is not a suggestion, it is a purely hypothetical discussion) on a big lump of bitcoin is troublesome. Getting to fiat is hard enough if you're doing it legit, if you want to do it with no paper/bank trail you're looking at getting on localbitcoins, selling in person for cash, and being really fucking careful about who you sell to (check their buyer feedback so you don't get robbed). If you've got the large amount we're talking about you'd obviously want to sell in smaller amounts. Always meet in public, in a cafe or something, and ideally bring a friend who looks like they can take care of themselves. Be aware that the government and police have clocked that criminals are using this method for drug money laundering and suchlike, so if your buyer mentions, at any point, even in passing/in allusion/as a joke, that they're going to do anything illegal with the bitcoin you're selling them then there's a real chance that they're actually law enforcement fishing around, and if you sell them any coin you will get slapped with a serious offence. I've heard of this happening to sellers in the US and UK.
I suppose you could buy some valuable items with resale value close to their retail value (you're on your own here) as there are lots of retailers who support Bitcoin now, and then sell them for cash or on ebay or something. You'd take a haircut but maybe not as much as you would if you declared.
If you want to get really paranoid about it, the techy solution would be to send roughly the largest amount a taxman wouldn't care about to one of the exchanges to cash out (check the /r/bitcoinuk subreddit and bitcointalk for the latest on which are currently support GBP transactions). Then some time later send the remainder off to some onion tumblers, punt it through an exchange or two that'll let you mess around with crypto-to-crypto exchange, convert to an altcoin, convert back again, then out to a new wallet. Do this in Tails and over TOR. That'll effectively rinse your coins, though you'll lose 5% or so to fees. If anyone asks, that bitcoin was stolen. Store the new wallet file as a paper wallet (laminate multiple copies and put them in multiple places), or put the wallet on some old PC hardware, e.g. small flash drives and old HDDs, again as many as possible, especially as both are apparently prone to dying if not switched on regularly. You could also use 7zip to AES-256 encrypt an archive with a long password, and upload that to various cloud services, again using Tails and Tor and obviously not using any identifiable details for the accounts. Then over the coming years fire up Tails/TOR again and do the same rinsing process (ideally halfway through the year for maximum deniability, and use different services), then send yourself some more bitcoin and cash out again (assuming that regulations haven't tightened by that point to the degree that it's impossible here). Each time you'll need to have some kind of halfway plausible story about what it was payment for ready just in case HMRC come snooping. Yes, this is a massive pain in the arse and you should probably just pay your taxes.
Of note, the reason that Bitcoin has spiked in value is that certain countries are starting to tighten the screws on personal holdings and transfers (South Korea, China, and Japan, I think - at least, they're the places that Bitcoin have hit $3K per coin recently), and others are cracking down on high value cash transactions, India being a good example by removing 500 and 1000 Rupee notes. It is likely that this will continue, and occur in other places, which means that demand for Bitcoin is likely to remain relatively stable or increase. If this is the case then it should help make the Bitcoin market less thin, and Bitcoin more stable in price, making Gox-like crashes less likely and, in theory, making it safer to hold Bitcoin.
The counterpoint to the above optimism is that there's an embarrassing crypto-nerd bitch fight occurring behind the scenes regarding the software/protocol, it's a complex mess that I suspect nobody here but me is interested in hearing about (I can go into it, if someone wants another wall of text) but the short of it is that right now the Bitcoin network is currently more than a bit clunky. One of the reasons that e.g. Litecoin has risen in value is that it has extremely fast confirmation times and low transfer fees (minutes and you can send for pennies if you're prepared to wait a little longer); by contrast, for Bitcoin it can take hours for your transaction to be picked up by a miner even if your fee is a quid. There's something of a civil war going on and if things really go south it could get pretty ugly, to the point that Bitcoin's undisputed hegemony over all other cryptocurrencies could actually dissolve. If you're holding, in the long-term you should keep an occasional eye on bitcoin's market share vs. other cryptocurrencies.