Last updated: August 2024
This article is general information about UK tax rules, as we understand them on the date shown. It is not advice on your circumstances. Tax rules depend on your own facts and can change, so please speak to a tax professional before acting on it.
The main taxes that apply to cryptocurrency gains or losses in the UK are Capital Gains Tax (CGT) and Income Tax. For the large majority of cryptocurrency users, CGT is the applicable tax.
Anyone who holds cryptoassets needs to consider if they are engaged in financial trading in cryptoassets, rather than simply assuming they are taxed under the capital gains tax regime as an investor.
Individuals who are classified as financial trading in cryptoassets are required to pay income tax and national insurance on their profits, rather than capital gains tax on their gains. Therefore, being classified as a trader rather than investor usually results in a higher tax bill.
Fortunately, HMRC has stated that being classed as financial trading in cryptoassets “likely be unusual”. Consideration of whether or not an individual is engaged in financial trading is a very complex area, and those who believe they may fall under the classification of a trader should discuss this with a chartered accountant.
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