HMRC has reminded investors in cryptoassets that they should declare any income or gains above the tax-free allowance on a tax return.
If you hold cryptoassets such as Bitcoin you need to pay tax on any income or gains you have made.
Most individuals investing in cryptoassets will be subject to capital gains tax on the following activities:
- selling cryptoassets in exchange for regular currency.
- exchanging cryptoassets for other cryptoassets.
- gifting cryptoassets to anyone other than a spouse or civil partner; and
- using cryptoassets to buy goods or services.
In some exceptional circumstances, an individual transacting in cryptoassets may be deemed to be trading and subject to income tax rather than capital gains tax.
If you need to report income or gains on cryptoassets that relate to the tax year 2023-24 these can be added to your self-assessment tax return.
For gains relating to 2022-23 there is still time to amend a previously submitted return.
For any gains relating to previous tax years HMRC has launched a voluntary disclosure service to enable taxpayers to report undeclared income or gains.
Using the new service is not compulsory and taxpayers with more complex tax affairs, or undeclared gains not related to cryptoassets, should consider other reporting routes. We can help you decide on the most suitable option for you.