Antony Greenwood explains how cryptocurrency should be treated for tax purposes.
HMRC released its guidance on how cryptocurrency should be taxed in December 2018 and has now enshrined that guidance in its manuals. However, this will have come too late for many individuals who had received, mined, or exchanged cryptocurrency before the 2017/18 tax year.
We have outlined below how cryptocurrency should be treated for tax purposes, but we are aware of individuals who have already been contacted by HMRC in relation to their cryptocurrency transactions. HMRC has confirmed it has been approaching exchanges for information on their users’ activities, and will shortly begin sending ‘educational’ letters to individuals that have held cryptocurrency.
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