Cgt On Cryptocurrency Uk

Cryptocurrency Capital Gains Tax (CGT) in the UK

Changes to CGT for Crypto Assets

The UK government has announced changes to the Capital Gains Tax (CGT) treatment of crypto assets. Effective from April 2024, the annual exempt amount for CGT on crypto assets will be reduced from £6,000 to £0. This means that individuals will be liable to pay CGT on any gains they make from the sale of crypto assets, regardless of their value.

CGT Rates for Crypto Assets

The CGT rates for crypto assets are the same as the rates for other capital gains. These rates range from 10% to 20%, depending on the individual's income tax band. CGT is only payable when the crypto assets are disposed of, such as when they are sold or exchanged for another currency.

Calculating CGT on Crypto Assets

To calculate the CGT payable on crypto assets, individuals need to determine the gain or loss made on the disposal. This is done by subtracting the cost of acquisition from the sale proceeds. The gain or loss is then added to the individual's other taxable income and taxed at the appropriate rate.

Exemptions from CGT

There are a few exemptions from CGT on crypto assets. These include: * Gains made on the disposal of crypto assets held for less than 365 days * Gains made on the disposal of crypto assets that are used as a primary residence * Gains made on the disposal of crypto assets that are inherited

Conclusion

The changes to CGT for crypto assets will have a significant impact on individuals who buy and sell crypto assets as investments. It is important for individuals to be aware of these changes and to factor them into their investment decisions. Failure to do so could result in unexpected tax bills.