Cryptocurrencies/ Cryptoassets

HMRC sees cryptocurrencies, not as a currency, but as investment assets and so transactions are subject to Capital Gains Tax.

You might need to pay Capital Gains Tax when you:

• sell your cryptocurrency
• exchange your cryptocurrency for a different type of cryptoasset
• use your cryptocurrency to pay for goods or services
• give away your cryptocurrency to another person (unless it’s a gift to your spouse or civil partner)

Your gain is normally the difference between what you paid for the cryptoasset and what you sold it for. If the cryptoasset was free, you will need to use the market value when working out your gain.

Income tax, instead of Capital Gains Tax, would only apply to dealers that are generating trading profits in cryptoassets. It would be very rare for HMRC to assess an individual’s cryptoassets activity to be applicable to Income Tax and this is likely to only affect professional traders and businesses.