Cryptoasset investors need to be aware of tax obligations

Those who have cryptoasset investments are being urged to keep up-to-date records should they need to pay tax on them.

Concerns have been raised regarding the public’s lack of awareness when it comes to their tax obligations if they have cryptoassets, such as Bitcoin, Ripple or Ethereum.

For reporting taxable gains from 2024/25 onwards, tax returns will now contain a dedicated cryptoasset section, but the Chartered Institute of Taxation (CIOT) and its Low Incomes Tax Reform Group (LITRG) are calling on HMRC and the government to help ensure all those who invest are fully aware of the tax implications, and on investors to make sure they keep proper records.

Gary Ashford, president of the CIOT and chair of the CIOT’s Cryptoassets Working Group, commented, “A dedicated cryptoasset section within tax returns is a definite step in the right direction to ensure relevant transactions are reported to HMRC.

“However, those who might need to report cryptoasset activity on their 2024/25 tax return will need to make sure that they have adequate records to do so.

“Furthermore, with the reduction of the CGT annual exemption to £3,000, a historic low, many more people will find themselves within the obligation to report and pay CGT for the first time. We are concerned that these individuals will simply not be aware of this requirement and will be hit by unexpected HMRC tax and penalty charges, perhaps several years later, which will come as an unpleasant surprise.

“By making sure as many people as possible are warned of their tax obligations, HMRC will make it more likely that these people pay their taxes, saving themselves having to chase overdue tax.”

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