The United Kingdom tax collection service published its first detailed tax legislation for private cryptocurrency holders Dec. 19 following a lengthy consultation period.
Its new policy paper, "Cryptoassets for Individuals," sets out likely tax obligations for private investors who buy, sell, get paid in and even lose cryptocurrency.
Capping months of uncertainty among U.K. taxpayers over what they need and need not report to authorities about their holdings, the latest information is officially endorsed by tax collection agency HM Revenue & Customs.
Specifically, individuals will be liable to pay either Capital Gains Tax or Income Tax depending on the type of cryptocurrency transactions they are involved in.
In the case of receiving payment from an employer in cryptocurrency, employees would also have to pay social security contributions known as National Insurance.
"The tax treatment of cryptoassets continues to develop due to the evolving nature of the underlying technology and the areas in which cryptoassets are used," HMRC writes introducing the paper.
HMRC will look at the facts of each case and apply the relevant tax provisions according to what has actually taken place. Our views may evolve further as the sector develops."
Among the notable features of the HMRC's position are tax liability in the case of loss or theft of cryptocurrency, for example through hacking of a wallet.
The U.K. had come under fire in the preceding months over various plans for cryptocurrency regulation which may see a ban on certain types of associated instruments such as Bitcoin futures.
A recent survey revealed high rates of ownership and interest in cryptocurrency, along with a strong belief in its future growth prospects.
United Kingdom Releases Tax Advice for Cryptocurrency Investors
Udgivet den Dec 19, 2018
by Cointele | Udgivet den Coinage
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