How is my crypto taxed? Surprising answers for UK residents and non-doms

In the increasingly digital world we live in, HMRC are simultaneously trying to keep up with, and crack down on, new ways of avoiding tax. Of particular significance, is the rapidly expanding cryptocurrency market, often making headlines for mind-blowing returns (and losses). Recent estimates suggest there are over 10,000 cryptocurrencies available on exchanges worldwide – although the top 20 cryptocurrencies make up nearly 90% of the total market. These include Bitcoin (BTC), Ethereum (ETH), XRP and Elon Musk’s favourite – Dogecoin.  

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Crypto Assets? HMRC have their eye on you…

Cryptocurrency and crypto assets are increasingly becoming a common investment opportunity for many individuals and businesses. Whilst most investors will be ‘testing the water’ with any gains arising from the Capital Gains Tax ‘CGT’ annual exempt amount of £12,300 each year, there are others who are lucky enough to be realizing substantial gains which do need to be reported to HMRC. Crypto also provides privacy and anonymity, which can, unfortunately, attract criminal activity.

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UK Non Doms subject to HMRC scrutiny

HMRC action

The UK still provides significant UK tax mitigation strategies for overseas income sources where you are tax resident here, but not UK domiciled (Non Dom). HMRC are looking very closely at this group of individuals and have recently issued “Nudge letters” asking them if they are confident their tax liabilities have been reported correctly, particularly targeting those who have been resident in the UK for a number of years.

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Investigating Inheritance Tax – HMRC haul hits four year high

HM Revenue & Customs (“HMRC”) has recently reported a 4-year high in Inheritance Tax (“IHT”) revenues after collecting an additional £274m as a direct result of more than 5,000 investigations during the 2019/20 tax year.

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Sold UK property in 2018/19? You could be next on HMRC’s ‘hit list’

HMRC have confirmed they will be issuing over 14,000 letters before 30th November to individuals who have sold a UK property in 2018/19, that didn’t appear to be their main home and which could therefore potentially be subject to UK Capital Gains Tax rules.

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HMRC have undeclared holiday letting income in their sights…

The 2019 financial statements for Airbnb have recently been published and include a note confirming that it will share data with HM Revenue & Customs (“HMRC”) about the letting income earned by its hosts in the 2018 and 2019 tax years.

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HMRC Nudge Letters for Overseas Income – another batch issued in July 2020

HMRC’s very own “tax gift that just keeps giving”…

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HMRC Toughen Its Stance – Additional HMRC Task Forces and Criminal Prosecutions

HM Revenue & Customs (HMRC) specialist task forces are believed to have collected over £540 million in extra tax revenue in the last financial year. Since their inception in 2011 there have been well over 100 different task forces focusing on a variety of sectors where HMRC believe tax evasion is rife, such as the restaurant trade, the haulage industry, the fishing industry, and the property & construction sectors!

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British Expats Beware – HMRC are coming…

Big Brother

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Successfully Navigating Disputes with HMRC

With the many measures adopted during the ongoing COVID-19 crisis, HM Revenue and Customs (HMRC) has been supportive of businesses in the current difficult climate.  However, this more helpful approach is different from the normal face HMRC presents to taxpayers. 

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