Insights

Business and Accounting Information

Tax on sale of cryptoassets

Most individuals hold cryptoassets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases. HMRC is clear that these holdings will usually be subject to Capital Gains Tax (CGT) when:

Most individuals hold cryptoassets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases. 

HMRC is clear that these holdings will usually be subject to Capital Gains Tax (CGT) when: 

  • selling tokens
  • exchanging tokens for a different type of cryptoasset
  • using tokens to pay for goods or services
  • giving away tokens to another person (unless it is a gift to your spouse or civil partner)
  • donating coins to charity 

To check if you need to pay CGT, you will need to work out your gain for each transaction. The way a gain is calculated is different if you sell tokens within 30 days of buying them. If the asset was acquired free of charge, then the market value at the time should be used to calculate the gain. 

Taxpayers can deduct certain allowable costs when working out their gain, including the cost of:

  • transaction fees paid before the transaction is added to a blockchain
  • advertising for a buyer or seller
  • drawing up a contract for the transaction
  • making a valuation so they can work out the gain for that transaction

If the taxpayer’s activity is trading, then Income Tax will take priority over CGT and will apply to profits (or losses). 

Source: HM Revenue & Customs Mon, 24 May 2021 00:00:00 +0100

Latest News

Outdoor measures to be made permanent

Outdoor measures to be made permanent

Temporary measures that have given a huge boost to high streets and hospitality during the pandemic could be made permanent following a public consultation launched in September 2021.

From marquees being put up in pub grounds, to street markets

Capped social care costs from October 2023

Capped social care costs from October 2023

The government has announced new plans to cap social care costs in England from October 2023. This change is expected to see the introduction of a new £86,000 cap on care costs across an individual’s lifetime.

There will also be the following

Pension triple-lock abandoned for one year

Pension triple-lock abandoned for one year

The government has confirmed that its triple-lock guarantee on pensions is to be abandoned for one year. The guarantee was first introduced in 2010 and has remained in place until now. This guarantee has seen the full yearly State Pension increase by