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Home » News & Insights » Are you aware of the taxes that apply to crypto-assets?

Are you aware of the taxes that apply to crypto-assets?

Posted on 10th May 2021

In most cases, individuals hold crypto-assets (such as Bitcoin) as a personal investment, usually for capital appreciation in its value or to make purchases. They will be liable to pay Capital Gains Tax when they dispose of their crypto-assets.

This includes: 

  • selling tokens
  • exchanging tokens for a different type of crypto-asset
  • 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)

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

Individuals will be liable to pay Income Tax and National Insurance Contributions on cryptoassets which they receive from:

  • their employer as a form of non-cash payment
  • mining, transaction confirmation, or airdrops

There may also be cases where an individual is running a business that is carrying on a financial trade in crypto-assets and will therefore have taxable trading profits.

If you need to declare crypto-assets in a tax return, call MJB to discuss your requirements (08000) 388 799

Source: Informanagement

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Disclaimer:- The information contained herein is given by way of general guidance only and no action should be taken solely on the basis of the information contained herein. The Avanti Group (UK) Ltd will be pleased to provide further guidance on the issues, and how they might affect you. No liability is accepted by the firm for any action taken without seeking appropriate professional advice

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