Cripto trader

The tax treatment of crypto assets in the UK depends on the nature of the activities involving these assets and the entity holding them.

For individuals, HMRC taxes crypto assets based on the activities conducted with them. If an individual is trading crypto assets, income tax will apply to the trading profits. However, HMRC expects that only in exceptional circumstances would individuals buy and sell crypto assets with such frequency and sophistication that it amounts to a financial trade. In most cases, the buying and selling of crypto assets by individuals will be subject to capital gains tax (CGT) on the disposal of the assets. The chargeable gain is calculated on the proceeds of the sale, less any amounts already taxed and any incidental costs of sale tax treatment of crypto assets for individuals.

For companies, the tax treatment of crypto assets depends on whether the company is trading in crypto assets or holding them as investments. If a company is trading in crypto assets, it will be subject to corporation tax on trading profits. If the company is not trading in crypto assets, it may still be subject to corporation tax on capital gains (CTCG) on the disposal of the crypto assets. The determination of whether a company is trading in crypto assets follows similar principles to trading in shares and securities C6.136 Corporation tax on capital gains (CTCG).