Cryptocurrency Tax

Cryptocurrency tax is an area of growing concern for investors, traders and businesses as cryptocurrency and Cryptoassets become more popular.

This rapid growth has also attracted notable attention from HMRC, who are eager to ensure that all businesses, investors and traders are paying the correct amount of tax on cryptoassets. It is important that anyone active in this sector has their tax affairs structured correctly, in a tax efficient way, whist remaining compliant with HMRC. This will help to avoid any penalties and fines as well as unplanned tax bills.

As a relatively new area, cryptocurrency/cryptoasset tax rules are fast-moving, so it is important to keep abreast of the current and fast developing legislation. HMRC will look at the facts of each individual case in determining any taxable liability and its views may change as the sector continues to evolve.

The specialist team at Alexander & Co is experienced with dealing with the tax issues surrounding cryptoassets and cryptocurrency for traders, investors and businesses. We can ensure that your affairs are structured correctly, in the most tax efficient way and are compliant with HMRC. We are also able to help resolve any current HMRC investigations and by ensuring you remain compliant, minimise the likelihood of any future investigations.

To discuss how we can assist you please contact a member of our specialist team.

Contact a Cryptocurrency Tax sepcialist

Which taxes apply to Cryptocurrency and cryptoassets?

Cryptocurrencies are virtual or digital currencies that use cryptographic functions to carry out financial transactions and are not controlled by any central authority. They leverage blockchain technology to gain this decentralisation.

Cryptoassets are the assets that are stored on distributed ledgers. This not only includes all cryptocurrencies but also non-currency assets such as utility tokens and security tokens.

HMRC does not deem the buying and selling of cryptoassets to be the same as gambling. Depending upon how cryptoassets are held, Capital Gains Tax, Income Tax and Inheritance tax can all apply.

Mostly, people hold cryptoassets as personal investments, typically for capital appreciation or to make specific purchases. Capital Gains Tax may be liable, when cryptoassets are disposed.

You will also usually be liable for Income Tax and National Insurance contributions on cryptoassets held by individuals, when they are received from either:

  • An employer as a form of (non-cash) payment, or
  • From airdrops, transaction confirmation or mining

For the purpose of Inheritance tax, Cryptoassets are treated as property.

Contact us for advice & assistance

At Alexander & Co, all our tax accountants are fully certified, ensuring we provide expert advice to help reduce your tax liability as much as possible and keep you on the right side of HMRC.

We offer a complimentary initial consultation to review your personal circumstances and discuss the best route forward. This can be arranged face to face, or if you prefer via phone or video call.

In addition to providing cryptocurrency tax advice, we provide a comprehensive range of tax and accountancy services.

To discuss how we can assist you please contact a member of our specialist team.

Contact a specialist cryptoasset tax advisor

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