Coin Market Cap
 
Crypto Tax And ICO Regulations In The United Kingdom
Breaking News / Cryptocoins / ICO / More News

Crypto Tax And ICO Regulations In The United Kingdom

“We want to approach this in the same way as we approach other bits of the fintech sector in that we don’t want to stifle innovation, particularly in relation to the underlying technology, but equally we want to manage the risk.” - David Ra, deputy director of banking and credit at HM Treasury, on cryptocurrencies. In a statement from the HMRC on cryptocurrencies, Bitcoin in specific is defined as asset whereas other cryptocurrencies have to be looked into case by case. Overall, cryptocurrencies are legal in the United Kingdom and underlie tax and ICO regulations. Nevertheless, the full extent of regulatory efforts for the usage of virtual currencies is still evolving. Crypto taxation in the UK Depending on the extent to which the currency is used, it can be subject to income tax or capital gains with the latter being the most probable case and therefore looked into more deeply in this article. Gains have to be computed when a disposal is made e.g. the exchange or sale of cryptocurrency in sterling or any other fiat currency. Further examples: when exchanging for another cryptocurrency, when exchanging for goods or services, when gifting the cryptocurrency. For the tax category capital gains, the tax rate is 20% (for most assets) and will apply at the realization of gains. Chargeable gains can be reduced with losses from the year. Moreover, a loss can be carried forward to set against chargeable gains in future years. Activities that are exempt from tax liabilities are activities which generate speculative gains e.g. wins from gambling or betting. Other exceptions occur depending if the action is considered a trade, a hobby or a commercial act. This has to be regarded case by case. For 2018/2019 the annual tax-free allowance (for individual's asset gains) is £11,700. Nevertheless, if selling up to four times the annual allowance (£46,800 for 2018/19) of cryptocurrency, even if the profit made is less than £11,700, the sale has to be reported to the HMRC. The tax year runs from 6 April to 5 April the following year. At latest taxes must reported by 31 December after the tax year during which the gains were made. In July 2018, the UK joined ‘The Joint Chiefs of Global Tax Enforcement,’ or ‘J5,' a coalition which tackles the issue of cryptocurrency-enabled crime such as money-laundering or tax evasion. Read more here: Tax Authorities enter the market. ICO regulations in the UK Regarding initial coin offerings (ICO), the UK's Financial Conduct Authority (FCA) has issued a customer warning. In general, ICOs are allowed but are subject to future regulations. As for now, the FCA states ICOs to be "very high-risk, speculative investments," and that "there is a good chance of losing your whole stake as an investor." Currently the regulations are to be interpreted freely by ICO operators. However, the UK is having a look at ICOs and altcoins hence new regulations may be announced soon. UK banks on cryptocurrencies The financial sector in the UK is fragmented, with some banks embracing cryptocurrencies and especially the technology behind them and others totally banning virtual currencies. Here's a list of banks that e.g. allow or ban the purchase of Bitcoin.
  • Allowed to buy Bitcoin: HSBC, Santander, Natwest, TSB, Royal Bank of Scotland, Barclays
  • Banned to buy Bitcoin: Virgin Money, Lloyds Bank
More info on crypto taxation worldwide Blockpit, a company which develops an automated web-based and mobile cryptocurrency tax reporting and portfolio monitoring application, just recently initiated a platform for information on crypto tax legislations worldwide. The CryptoTaxMap shows country specific details on tax rates, tax categories and much more. As a community project the interactive map is open for user participation who can submit their knowledge via a simple form. Additionally, the project is backed by certified tax advisors who assure that the map stays accurate and up to date.   Disclaimer The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim neither correctness nor accuracy. For detailed information on crypto regulations we recommend contacting a certified legal advisor in the specific country. If any questions occur, feel free to contact Blockpit via their Telegram channel. Sources https://www.gov.uk/government/publications/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies/revenue-and-customs-brief-9-2014-bitcoin-and-other-cryptocurrencies https://www.pdf-archive.com/2018/04/20/cryptotaxes/preview/page/2/ https://blocktax.uk/guide/ https://www.womblebonddickinson.com/uk/insights/articles-and-briefings/uk-regulators-recognise-cryptocurrency-and-ico-risks https://www.fca.org.uk/news/statements/initial-coin-offerings https://www.bitcoinmarketjournal.com/ico-regulations/ https://www.businessinsider.de/bitcoin-ethereum-ripple-price-buying-cryptocurrencies-uk-banks-2018-2?r=UK&IR=T&rand=ne3znl#/#lloyds-bank-banned-1 https://cointelegraph.com/news/five-nations-launch-tax-enforcement-alliance-to-tackle-crypto-cybercrime-threat

You can share this post!

Bangkok Residents Trading Energy On The Blockchain

Silk Road Whales Move Millions In BTC Via Bitcoin Tumbling Service