It seems that there’s a lack of awareness from crypto investors about their liability for Capital Gains Tax (CGT).
Cryptocurrency may be the new big trend in finance. However, cryptocurrency enthusiasts may lack thorough knowledge of CGT and general taxation upon transactions done with cryptocurrency.
HMRC recently pursued a survey, wherein it found that 34% of cryptocurrency owners claimed to have a thorough knowledge of CGT, whereas around 37% of them had very limited knowledge while around 22% of cryptocurrency traders had no idea about CGT.
Moreover, around 42% of cryptocurrency enthusiasts had an awareness that they would have to pay a tax if they purchased goods and services using cryptocurrency, although 45% inferred that CGT might be applicable, while the remainder 40% thought that it would be VAT.
As per a survey conducted by the Financial Conduct Authority, around 10% of U.K. citizens had been investing in cryptocurrency this year. This was an increase from the 5.7%, as recorded last year.
Gains and losses incurred by each cryptocurrency investor were distinct and varied. However, two factors to be responsible for profits and gains were the volume of investiture and the corresponding mannerisms of cryptocurrency trading.
The primary utility of crypto assets is to invest. This is why, generally, they are liable for CGT.
Tax liability on cryptocurrencies is not yet well-known to the majority, as many are unfamiliar with the HMRC manuscript which explains how to do your taxes if you use cryptocurrency.