Is cryptocurrency taxable?
The taxable events of crypto transactions are treated as either capital gain/loss of income, depending on the type of transactions the users have done. In general, users need to report a transaction on their United Kingdom individual income tax return when they dispose of cryptocurrency. On the website of HMRC, disposition of cryptocurrency means as follows:
- Selling tokens for money
- Exchanging tokens for a different type of token
- Using tokens to pay for goods or services
- Giving away tokens to another person (unless it’s a gift to their spouse or civil partner)
Capital gains (in most cases).
20% for most assets.
Realization of gains.
Cryptocurrencies can be held for trading, gambling, and for capital gains: taxation depends on specific circumstances;
Statement HM Revenue & Customs
Included in annual Self Assessment tax return or reported by 31 January after the tax year during which the gains were made.
How is my cryptocurrency taxed?
When you dispose of cryptocurrency, it will be subject to capital gain/loss. This is calculated by using the proceeds less the total cost basis of the crypto, this includes the cost of the digital assets and selling transaction fee.
Disclaimer: This is not a legal, tax, accounting or investment advice. It is a general information which should only be used for introduction purposes. You should consult with a tax/legal specialist.