Do you have untaxed income and capital gains?
From HMRC’s perspective, if you’ve been UK resident while investing in cryptoassets, you’re likely to have untaxed income and capital gains.
Income can be received in the form of cryptoassets, for example from staking or even as remuneration for employment duties amongst other things. Capital gains and losses arise on the disposal of cryptoassets, which importantly includes token for token exchanges. This extends to cryptocurrency and NFTs. Click here for more information on the taxation of cryptoassets.
The position is less clear for non-domiciled individuals who claim the remittance basis of taxation and their position should be considered carefully.
If you’re a non-domiciled individual, you may benefit from the remittance basis of taxation, which limits your UK tax liability to tax on UK income and capital gains and remittances of any untaxed foreign income and gains. Therefore, the situs of the cryptoasset is significant when determining what is subject to tax when claiming the remittance basis. HMRC currently considers a taxpayer’s residence as determining the situs of their cryptoassets but this view has been contested by taxpayers.
If you’re a remittance basis user who has not paid UK tax on your cryptoasset income and gains, on the basis it’s foreign source, you must ensure appropriate advice is sought in respect of your position.. Click here for more information.