It’s worth taking a moment to remind ourselves where we are up to with cryptocurrency and personal tax.
If our own enquiry line is anything to go by, UK-based investors in cryptocurrency have had to endure a significant lack of clarity in recent years on what exactly amounts to a taxable gains to declare in the their UK self-assessment tax returns.
Between 2014 and 2018, investors and traders had only a very short guidance note from HMRC upon which to base their tax submissions. In that guidance, HMRC alluded to the general principles that some transactions could be considered as so speculative in nature – akin to gambling – that gains would not taxable. Naturally, many readers of this note took this as a reference to crypto-trading.
However, in a clarification at the end of 2018 which would have made Schrodinger’s Cat blush, HMRC has now stated that it does not consider cryptoasset trading to be akin to gambling – and that it never did. So what was that 2014 note all about, we may ask!
That is now water under the bridge, and it is safe to say that HMRC will now hold the default position that crypto gains are taxable as capital gains tax, although in each case the taxpayer may wish to consider building a ‘bottom-up’ case for alternate treatement on its own merits.
You can read more in this very useful summary <HERE>
And HMRC’s new notes and jottings are <HERE>
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