The Chartered Institute of Taxation (CIOT) and Association of Taxation Technicians (ATT) are urging cryptoasset investors to report their gains and losses in their self-assessment returns.
Cryptoassets like Bitcoin and NFTs are subject to income tax and capital gains tax, much like any chargeable gains.
That means any gains made in the 2021/22 tax year will need to be reported and paid tax on by the self-assessment deadline on 31 January. Any crypto losses over the same year must also be included in investors’ tax returns, as they can be offset against their gains.
According to experts at the CIOT and ATT, many taxpayers who invest in crypto are unaware of their obligations to HMRC.
Furthermore, the CGT annual exemption will reduce from £12,300 to £6,000 in April 2023, and then halve to £3,000 in 2024, making the issue even more acute.
Gary Ashford, chair of the joint CIOT/ATT cryptoassets working group, said:
“Not only can cryptocurrency investments trigger capital gains tax liabilities that are not obvious to the investor, but tax can be payable even where the investor does not think his or her crypto investments have been profitable.”
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