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.
Having a tax specialist who is experienced with the issues relating to cryptocurrency can offer you peace of mind. We have been advising clients on their cryptocurrency tax affairs since 2017. Indeed, we were one of the first (if not the first) tax advisory firms to proactively seek to properly understand the crypto marketplace, and the tax treatment of crypto transactions. Since then, we have amassed significant experience in this area, working with clients with crypto portfolios of a few hundreds of pounds to hundreds of thousands of pounds.
Since we advised our first client in 2017, we have continued to lead the way in this rapidly evolving area, ensuring we keep up to date with the latest developments, trends and even terminology! A number of our team are themselves active investors in cryptocurrency, and, as such we have first-hand experience of blockchain. We are even happy to take payment for our services in cryptocurrency.
Our team can help you ensure that your cryptoassets are structured properly. We can assist in calculating your taxable gains or losses on your cryptocurrency disposals, and deal with your HMRC filing obligations thus ensuring you are fully compliant. We can also assist those who are in dispute with HMRC or who are non-UK domiciled who may have specific tax needs relating to this area.
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.
To assist our team in reviewing your position and to deal with your enquiry more efficiently, please complete our brief questionnaire, after which you will be asked to leave your contact details if applicable.
This will enable us to get a better understanding of your current position, and to advise you correctly. Please ensure all fields are completed in as much detail as possible, as we may be unable to deal with your enquiry if we do not have all the information we need.
Did you make a profit on the sale of cryptoassets exceeding the annual exemption for Capital Gains Tax during any tax year (£12,300 for 2020/21 tax year)?
Did your gross proceeds from the sale of cryptoassets exceed more than 4 times the annual exemption in a single tax year (£49,200 for 2020/21 tax year)?
Have you participated in any wider crypto activities such as ICO’s, hardforks, airdrops, peer to peer lending, margin trading, staking, gaming or mining? If so, please provide a brief description of the relevant crypto assets involved and the value received from these activities.
When did you begin investing in Cryptocurrency and how much have you invested to date?
Please provide an estimate of the current value of your portfolio to date.
Have you previously declared all of your capital gains or profits to HMRC?
Have you been regularly trading cryptocurrency – if so, please provide an indication of the number of trades on average per month?
Are you able to obtain full records of your historic crypto transactions? If not, please provide an indication of the time periods for which records may be missing and an estimation of the number of transactions.