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Tax on cryptocurrency
Making the complex simple
The rapid growth in cryptocurrency and distributed ledger technology has seen an influx of new cryptocurrency business, traders and investors which has attracted significant attention from HMRC. In order to ensure that your tax is correct, you need to understand the particular tax treatment of cryptocurrency.
Calculating and Reporting Your Crypto Tax Liability
In broad terms, the tax treatment of cryptocurrency follows the underlying activity in which cryptocurrency is being acquired or sold. As such, crypto investors and traders must consider the wide degree of transactions ranging from basic purchase and sell orders to hard forks, airdrops, staking and the like.
If you are not tax resident in the UK or do not have a domicile in the UK then you can benefit from favourable tax rules.
As with many investment and trading activities it is wise to consider the tax treatment of proposed transactions properly, as this can usually save time and money later on.
If you would like help with assessing your crypto tax liability, reporting it on a self-assessment tax return and/or general advice on taxation of cryptocurrencies, please do contact us.
Crypto tax returns can be time consuming and complex and our fees start from £4,500 plus VAT.
NFTs and Blockchain Gaming
Taxation of cryptocurrency is made more complicated as the industry develops with emerging unique and complex crypto activities such as gaming and gambling platforms, and the evolution of non-fungible tokens and hybrid tokens used for specific purposes.
Whether you are an established NFT investor or artist, you are just starting out, you have already earned substantial sums with your CryptoKitties or you are about to start playing Axie Infinity or The Six Dragons and have big plans, ETC Tax can help.
Disclosure of Historic Crypto Tax Activity
We work with clients to help them understand the tax liabilities arising as a result of their previous crypto activities, as well as advising on their filing obligations with HMRC, before helping them make a full and thorough disclosure.
We ensure that any uncertainties or queries are addressed and pre-empt any possible enquiries by HMRC.
Want to know more?
If you are not looking for specific help right now; you can find out more in our Knowledge Centre or check out these other up to date resources from ETC Tax Consultant, Andy Wood.
Cryptocurrency and Other Digital Assets – Tax Law and Practice is a great option for those advising clients on crypto taxes or those who are heavily involved in the space. Published by Claritax Books, it can be purchased here.
Crypto Tax Degens (https://cryptotaxdegens.com/) is a fantastic source of information for crypto tax enthusiasts of all persuasions. With great up to the minute content delivered in a user friendly way, this is a great place to ‘meet’ like–minded individuals.
Case Study
Tax on Cryptocurrency
