The UK tax authority vowed to enhance data collections on investors making gains through crypto investment.
Though Bitcoin touched the 30,000 level after days of violent dumps befalling the crypto market, a large portion of investors have since then remained underwater. The recent market selloff led by Terra and its two native cryptocurrencies plummeting in value has at one point wiped out the crypto market’s total gains attained from 2021.
But for spooked investors in Britain experiencing losses, they can now offset them against future gains in tax filings, according to HM Revenue and Customs(HMRC), the non-ministerial department of the UK Government responsible for tax collection.
- Regarding taxation, HMRC said it views cryptocurrencies like bitcoin in the same way as equities investments, as reported by Yahoo Finance.
- Paul Webster, a director in the private client tax team at Kreston Reeves, claimed that investors now no longer have to worry about tax liabilities regarding crypto investments as “losses can be banked with HMRC and offset against future gains.”
- The director further clarified that the tax authority sees crypto gains as a type of capital gains with tax payable at 20%. Meanwhile, such losses can be used to offset future gains on capital gains attained from other forms of investments like property.
- Webster noted that since disposing of some digital assets may cost more than their value, investors may do nothing to avoid additional losses. According to the UK authority, such negligible value claims can be carried forward indefinitely while remaining eligible for future gains offset.
- For every UK investor, the annual capital gains allowance sits at £12,300, as this is also applicable for crypto investments. Investors can also give their spouse or civil partner assets without triggering additional capital-gain tax, which effectively doubles up the available tax-free gains each year.
- Governments worldwide have been doubling up forces drafting tax policies regarding crypto investment. As reported by CryptoPotato previously, the Indian tax authority – the GST council – mulled over the highest 28% GST slab for crypto gains, treating the sector on par with casinos, lottery, gambling, and horse racing, mainly due to the characterized speculativeness in digital assets.