Are your crypto assets tax compliant? Declare all wins and losses on your self-assessment

Did you know that cryptocurrency gains and losses must be declared to HMRC? Just like any other asset, crypto and non-fungible tokens (NFTs) are subject to Income Tax and Capital Gains Tax. In fact, due to the lack of awareness of crypto and tax compliance and the expectation of underreported gains, HMRC now has a special focus on the area.

Whether you’re finalising your self-assessment, planning ahead, or considering an investment into crypto, it’s important to fully understand the tax implications, many of which are not immediately obvious. For example, these investments can trigger capital gains liabilities and incur taxation even when you don’t think they have been profitable, or you don’t think you have disposed of anything.

Selling, lending, transferring and staking (holding) cryptocurrencies will trigger a disposal in that tax year, whether or not you take cash out of the asset, and regardless of gains or losses. And while specialist advisors, like the team here at Champion, have complete knowledge of the requirements, many crypto investors won’t call upon our expertise for support.

A significant amount of low-income individuals have invested in cryptocurrency, most without seeking tax advice. These people now run a risk of being caught out by HMRC and should act carefully to avoid investigation or fines.

‘Non-doms’ should also be aware that HMRC views crypto assets held by UK residents as UK situs assets, making them fully taxable.

It’s clear that current UK tax laws were not written with crypto in mind, resulting in confusion around what is and isn’t payable. Rest assured, however, that this is on HMRC’s radar and any investments into Bitcoin, Ethereum, or other crypto assets, like NFTs, are subject to tax.

Working with a trusted advisor, like our specialist team at Champion, will ensure that you are smart about your tax liabilities. To find out more, contact or call David on 0161 703 2500.

And take a look at our beginner’s guide to cryptocurrency and tax, here: