S&W The Pulse

Taxation of cryptoassets

Informações:

Sinopsis

Crytposassets have dominated the headlines for a while. The FCA have also recently published a research note that estimated 2.3 million people now hold cryptoassets in the UK. Despite this increase, they also suggest that the level of understanding of cryptoassets is declining.One of the key considerations is whether they are held for investment or trading purposes.  This will impact whether they are subject to capital gains tax or income tax.Income tax rates are currently higher than CGT rates that apply to investors.In most cases, cryptoassets are held as investments and profits on sale are subject to capital gains tax (CGT).Capital losses on cryptoassets can only be relieved against other capital losses, which is far more restrictive than trading losses.Crypto traders, just like those in stocks and shares, may instead find their profits are subject to income tax if the activity amounts to a trade; this is likely characterised by frequent buying and selling.There is a high hurdle to clear in order to meet t