Chris joined ETC as an Associate Director in October 2020. He is a Chartered Tax Adviser and Trust and Estate Practitioner and has advised both private clien...
As the popularity of crypto continues to increase, more and more people are taking the step towards investing in cryptoassets. For those who are just starting out, there is an ideal opportunity to ensure that the tax treatment of the way they invest in crypto is properly considered from the outset.
As with many investment and trading activities it can pay dividends to consider the tax treatment of proposed transactions before you get started, as this can usually save time and money later on.
Indeed, with HMRC also becoming more familiar with tax issues arising from blockchain, it would be wise to ensure things are on the right footing, especially if you intend to regularly invest in crypto or to invest significant sums.
Our fees for an introductory report such as this typically start from £1,500 plus VAT, but individual fee quotes are always given.
Advising on the tax implications of holding and trading cryptocurrency
Advising on tax reporting requirements for your crypto activities
Consideration as to whether to acquire and hold cryptoassets personally or through a company and the tax treatment of each
Mr R was employed full-time, and his crypto activities were speculative to start with, but he was interested to see how he may be able to progress things over the next few years. Mr R had invested small sums in crypto throughout the last 18 months but was due to receive a substantial bonus from his job later that month and planned to use that to invest further in cryptocurrency. Mr R receives large bonus’ every quarter and going forwards planned to invest all of those in crypto, and so it was highly likely that by the end of the year he will have exceeded the annual capital gains tax exemption of £12,300. Mr R he was keen to ensure that he was approaching things correctly from a tax point of view. Based on Mr R’s objectives and intentions with regards to his crypto investments, we determined that a company would likely be the most tax efficient way for him to hold his cryptoassets. We advised Mr R on the tax treatment of his upcoming investments and gave him advice on how and when to register his activities with HMRC.
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