Disposal of crypto assets triggers a capital gains tax charge, but clarity on non-fungible tokens (NFTs) is less clear. Zoe Wyatt, partner and head of crypto at Andersen, explains some of the factors for accountants and investors
The UK tax authority’s approach to cryptoassets is principles based. On 30 March 2021, HMRC published its cryptoassets manual, which embodied its policy document (Brief 09/14 - Tax treatment of activities involving Bitcoin and other similar cryptocurrencies) that was originally published in March 2014. What and how to tax DeFi was not considered until release of the DeFi chapters earlier this year on 22 February.
HMRC’s principles-based approach in the guidance still, nonetheless, came as a surprise to many. For example, some (predominantly retail) crypto investors had not appreciated that an exchange of one cryptoasset for another would be considered a disposal of the first, thus realising any inherent gain, giving rise to a capital gains tax (CGT) charge.
