GOV.UK - Tax on cryptoassets


There’s a new document on the website explaining how cryptoassets are taxed for individuals in the UK. Its great read and suspect it’s going to clear up a lot of confusion for some of us.

There are some related documents in regards to selling a receiving that they also published.

Good link. I was already aware of the Capital Gains implications, but it will be interesting to figure out how HMRC judge what the gain is…

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Yes, I’d also already come to the conclusion that I would have to pay capital gains in the event I make any significant money. I’d always had some doubts how to exactly calculate it though, but I think these new documents really helps explain a lot of it.

What’s exciting is that any clarification on tax implications can only be good for UK investment in crypto.

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I imagine that the charge is when you transfer the money back to your “normal” bank account… For example, if I invest £10K now - transferring the money to my Coinbase account, then use that to buy BTN, which I in turn use to buy ETN… then say hypothetically in a couple of years time, sell the ETN for £100000 ( :slight_smile: ), which goes into my Coinbase account - as long as I only return my profit to my normal bank account in smaller amounts - to keep under the annual capital gains allowance, I could probably get away without paying any Capital Gains Tax…


I had also thought that, but it does state…

What constitutes a ‘disposal’

Individuals need to calculate their gain or loss when they dispose of their cryptoassets to find out whether they need to pay Capital Gains Tax. A ‘disposal’ is a broad concept and includes:

  • selling cryptoassets for money
  • exchanging cryptoassets for a different type of cryptoasset
  • using cryptoassets to pay for goods or services
  • giving away cryptoassets to another person

It’s the “exchanging cryptoassets for a different type of cryptoasset” that worries me. Although it does not surprise me that it’s part of the gains calculation, it doesn’t explain if any tax is payable at that point.

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Technically, you can pay Capital Gains Tax at two points - it is possible to declare it as and when you make the gain and pay it then - but the usual method is to calculate it when you do your annual self assessment tax return and pay it just once a year for all the gains/losses you might have incurred…