How are Cryptocurrencies taxed (UK) Bitcoin +

With the recent resurgence of the popular crypto currency Bitcoin, there is a growing army of you wanting to get into investing in crypto assets. Understanding the way that cryptocurrencies are taxed and defined by HMRC and UK tax laws is essential if you want to maximise your chances of success when dealing with this popular digital asset.

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Capital Gains Tax Explained: https://www.youtube.com/watch?v=PoSjNaq61f0
Self Assessment Return Explained: https://www.youtube.com/watch?v=jcHIhlwQ-1s

⏱️ Time Stamps:
0:48 - What is a crypto-asset according to UK tax laws?
2:25 - How are crypto currencies taxed for individuals in the UK?
5:55 - How are crypto currencies taxed for non-UK individuals?
7:20 - Record keeping and reporting

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There are three different types of crypto asset, these are: Exchange Tokens, Utility Tokens and finally, Security Tokens. In this video we are focusing on exchange tokens. This is the most popular form of crypto currency and the category which the popular cryptocurrency Bitcoin belongs to.

If you are a UK tax resident and you make a gain from a crypto-asset then you will be subject to Capital Gains Tax. In rare occasions you could be charged income tax, namely if your business was trading cryptocurrencies. If you are a non-UK resident then you will generally not be subject to UK taxes, CGT and Income Tax included.

What's particularly important to note about cryptocurrencies is that HMRC are adopting to tax the individual instead of the asset due to its non-tangible status. This means that it does not matter where you hold your crypto-wallet. You cannot simply hold your crypto-wallet in a tax haven country to avoid paying UK tax. If you, the individual, are a UK tax resident then you will be liable for all associated taxes. This goes the other way too; if you are a non-UK resident then you can still hold your crypto-wallet in the UK and not be liable for CGT and other associated taxes.

It is your responsibility to keep detailed records of your transactions and other information that we have covered in this video. Since gains and losses will have to be declared on your self assessment tax return you must keep this information on file for a minimum of 5 years after the 31st January deadline pertaining to that tax year. Although many trading sites and companies do keep records of transactions, ultimately the responsibility lies with you and it is in your best interest to keep as detailed accounts as possible.

We hope this video has given you a better understanding of how the taxes work for crypto-currencies and taken you one step closer to knowing your numbers. Please make sure you like and subscribe as this really helps us to create more free content for you. Finally, let us know what you think in the comments sections, are you considering investing in Bitcoin or a similar cryptocurrency?

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