Cryptoassets and tax

Cryptocurrency? Bitcoin? The blockchain? Did you dive in as an early uptaker or are you still getting used to the terminology?

From the start, the cryptoasset sector has attracted people fascinated with emerging technology and keen to explore its potential for wealth creation. Inland Revenue has released guidance on cryptoassets and taxation and we expect to see more over time.

There may be tax consequences resulting from cryptoassets when:

• receiving them as payment for goods and services
• using them to pay for goods and services
• buying and selling cryptoassets (trading)
• acquiring them and holding on to them as an investment, or
• mining them

You need to file a tax return when you have taxable income from cryptoasset activity.  

Where cryptoassets have been used for remunerating employees, Inland Revenue have released guidance on cryptoassets:

• being used to pay employees as wages, salary, or bonuses
• provided by employers to employees as benefits in arrangements similar to employee share schemes

It’s important to get the tax right and report it correctly in your tax returns. It’s a complex area and we can help you understand your tax obligations.