Attention! New guidelines for crypto holders were announced by the UK Tax Agency

The UK’s tax agency has recently issued a detailed description of how it regards crypto assets and how its owners might be taxed on their assets.

HMRC (Her Majesty’s Revenue and Customs), the branch of government in charge of tax collection and overseeing other aspects of the nation’s treasuries, stated that one of latest reports particularly aims to describe how persons owing digital assets may be taxed, but does not draw attention to the tax model for tokens held by companies or for business means.

The aforesaid document follows on previous reports from the UK authority, defining crypto assets more as property than as a mean of payment.

HMRC does not regard crypto assets to be currency or money. This considers the point of view earlier stated in the report from the CATF (Cryptoasset Taskforce), as well as point out that the CATF characterized cryptocurrencies as either exchange, utility or security tokens.

Deserving to note that the above-mentioned report explains that the method of token treatment depends rather on the token’s use case, than its definition.

HMRC stated that the guideline takes into account the taxation of exchange tokens (like Ethereum or Bitcoin) and does not particularly treat utility or security tokens. For utility and security tokens it provides basic principles.

The report goes into details, explaining to UK residents how and when their possessions or related transactions might be classified. It says:

“There may be cases where the individual is running a business which is carrying on a financial trade in crypto assets and will therefore have taxable trading profits. This is likely to be unusual, but in such cases Income Tax would take priority over the Capital Gains Tax rules. HMRC will publish separate information for businesses in due course.”

The coin-holders may combine different assets together in order to simplify the obligatory calculations and avoid the separate calculation of each asset individually.

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