HMRC wants to raise awareness of the fact that cryptoasset transactions can result in tax bills. It appears there is still some way to go.
In a recent survey, 41% of respondents said they had no information about tax and their cryptoassets. In light of this, it’s perhaps no surprise that we heard in the Spring Budget that the design of the Self Assessment tax return is going to change. From 2024/25, the Capital Gains Tax pages will specifically ask for information on income and gains from cryptoasset transactions. This is meant to serve as a reminder that crypto transactions are within the scope of tax rules and should form part of the yearly review of the tax position.
The buying and selling of cryptoassets is usually treated as a personal investment. This brings it within the Capital Gains Tax regime. However, with the Capital Gains Tax annual exemption currently falling, more people are likely to find themselves liable for the tax. The exemption is currently £6,000 but by April 2024 – when the new look tax returns are issued – will be £3,000.