Investors holding Bitcoin and other cryptoassets could come under the taxman’s spotlight in the Budget.
Chancellor Rishi Sunak is due to deliver his Budget on 3 March and an accountancy is warning that investors holding cryptoassets could face a crackdown.
The price of the largest cryptocurrency, Bitcoin, has reached record highs in recent months and there are a number of peer-to-peer lenders letting investors fund loans using cryptos and the blockchain network.
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Thomas Gibbs, a principal in the private client team at Hillier Hopkins, warned the huge increases in Bitcoin’s value in recent weeks will see HMRC take a keen interest where investors choose to cash-in on that growth.
“HMRC sees cryptocurrencies not as a currency but as investment assets and as such are subject to capital gain tax,” Gibbs said.
“Crypto assets are assumed by many investors to be easily hidden, but are increasingly traded via online platforms and marketplaces.
“With capital gains tax rates expected to increase in the Budget, investors should not ignore any letters from HMRC and should first seek specialist advice.
“Paying capital gains tax now at the 20 per cent rate will be preferable to a potential rate of 40 per cent.”