Tax Returns & Crypto Currencies

 

Tax Returns & Crypto Currencies

 

There is currently a discussion taking place around the inclusion of Crypto currency disposals and the tax implications. Generally speaking, all disposals of Crypto currencies are subject to the UK Tax Regime.

Generally any profits made on trading a crypto asset are treated as Gains within Capital Gain Tax rules . This is, or should be, very straightforward if gains are made from trading the asset ie; buying it, holding it and then selling it when hopefully it increases in value.

HMRC have pointed out that the trading becomes less clear when crypto is used to purchase something. This is still a disposal for tax because in reality it reflects the encashment of the crypto and then the “cash” has been used to make the purchase. 

We understand that going forwards, HMRC will require full disclosure of all transactions in crypto within tax returns.