Response from the profession
The reaction from the tax profession is critical of the guidance, on the grounds that HMRC have not sufficiently justified the criterion of residence. In other contexts, the location of an intangible asset depends on the commercial environment, such as the location of the relevant trading exchange or the place where a contractual claim can be enforced.
The absence of legislation on the question has opened up a policy vacuum, which HMRC has attempted to fill with a commercially arbitrary test, based to all appearances on little more than expediency.
Despite the continued uncertainty, we have already seen evidence of HMRC applying their new guidance to real cases. It may well take a Tribunal or Court judgement to clarify the position, or, perhaps even better, a legislative change which addresses the issue.
Pending such clarification, there will be continuing uncertainty for taxpayers who have already reported gains realised on cryptocurrency in accordance with the remittance basis and who need to know how to report such gains in the future. It is always important to remember that HMRC guidance is not legislation and is open to challenge.