Cryptocurrencies – what are the tax implications?

Bitcoin and similar Cryptocurrencies have received a lot of interest in recent years. As far back as 2014 HMRC issued a briefing (brief 9-2014) outlining its approach to the taxation of Cryptocurrencies.

Tax Treatment of Cryptocurrencies

The above paper states that any profit, gain or loss will be looked at on a case by case basis. Nevertheless the activities of a Bitcoin or other Cryptocurrency minor should be regarded as a trading activity. What is crucial is the intention at the outset of the individual or company who acquires the Cryptocurrency. Generally this would be as an investment, therefore any gain or loss on disposal should generally be regarded as a capital transaction.

McPhersons have a dedicated tax department with expertise in this area so please contact us to discuss further. In the meantime, read our full article on Cryptocurrencies by clicking on the image below.

 

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