The United Kingdom’s tax service has presented a new policy paper titled “Cryptoassets for individuals,” which describes tax guidelines for private crypto investors and hodlers.
The paper states cryptos “are a relatively new type of asset that have become more prevalent in recent years.”
It also highlights since private hodlers buy/sell crypto as a personal investment, usually “for capital appreciation in its value or to make particular purchases,” they will be liable to pay Capital Gains Tax (CGT) or Income Tax (IT). The kind of taxation, first of all, depends on what kind of crypto investors are hodling.
However, the paper doesn’t give any kind of information regarding business’ taxation.
The document also states that mining activity may be taxable as income if the mining activity does not amount to a trade.
“Fees or rewards received in return for mining (for transaction confirmation) are also chargeable to Income Tax, either as trading or miscellaneous income depending on the: degree of activity, organization, risk, and commerciality,” the paper states.
Earlier, Member of the United Kingdom’s Parliament, Eddie Hughes, said there’s a way of using bitcoin as a payment method for local taxation system.
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