UK tax on cryptocurrency

Cryptoassets have undoubtedly grown in popularity over the past year and with cryptocurrency prices increasing at a rapid rate, many investors are likely to have made sizeable gains. But are investors aware of the UK tax implications?


In a statement released in 2019, HMRC confirmed that individuals selling cryptoassets will be subject to capital gains tax (CGT) on any profits made, over the tax-free annual allowance threshold. These gains will need to be reported to HMRC on a self-assessment tax return.

Capital gains tax will be due where there is a disposal of cryptoassets and a gain has been made or when one cryptoasset is exchanged for another. If you were to exchange Bitcoin for Ethereum and make a profit, this would be seen as a deemed disposal for tax purposes and CGT would be due.

It is important to note that capital gains tax is only due on overall gains above the annual allowance, which is £12,300 for the 2021/22 tax year.

In some cases, HMRC has deemed the buying and selling of cryptoassets as trading. Under UK tax, profits made from trading will be subject to income tax and not capital gains tax. However, this is a rare occurrence as the majority of individuals are not seen to be trading.

Whether you are an individual or a business, we can ensure you are complying with tax regulations surrounding cryptoassets.

At STS (Europe) we can offer advice to ensure tax compliance when trading with cryptoassets. We can also assist with the completion of self-assessment tax returns and ensure all profits are taxed in the correct manner.

If you are trading with cryptoassets and would like to know how we can help ensure you are tax compliant, get in touch with us.


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