Tax Regarding Crypto Gifts and Donations | Donating Crypto
Whilst seen as disposal, gifting, and donating cryptocurrencies have some special circumstances surrounding them which leads them to be taxed as Capital Gains Tax or is considered tax-free. Read on to find out more.
CRYPTO GIFTS FOR FRIENDS
Before anything, this does not include gifting crypto to your spouse or civil partner. Otherwise, gifting crypto to friends, loved ones, relatives, clients, or even acquaintances will be subjected to be taxed as Capital Gains Tax where one needs to calculate the market value (in pound sterling) on the date it was gifted (as prices waver from day to day).
Additionally, if the value of the gifted tokens has already been subjected to be taxed as Income Tax, then 37 Taxation of the Capital Gains Tax Act 1992 will be applied. This means that it will still be subjected to be taxed as Capital Gains Tax but the sales proceeds will be deducted by the amount that has already been taxed as Income Tax.
CRYPTO GIFTS FOR YOUR SPOUSE OR CIVIL PARTNER
Any crypto gifted to your spouse or recognized civil partner in the United Kingdom will be considered tax free and there is no limit as to how much crypto you can gift.
CRYPTO DONATIONS TO A REGISTERED CHARITY
Just as gifting crypto to your spouse or civil partner is considered tax-free, the same goes for donations to any registered charities in the United Kingdom.
However, there are two exceptions to this rule:
If the crypto assets are sold to the registered charity at a cost that exceeds the acquisition cost, then the amount of the difference between the selling price and the acquisition cost will be subjected to be taxed as Capital Gains Tax.
If the crypto donation is given to the charity with the arrangement of the donor to receive some financial advantage or benefit at the time of donation or in the future, then this donation will be taxed accordingly.
Experts at Crypto Accountants UK
When it comes to gifts and donations, our experts at Crypto Accountants can determine which of your crypto assets and transactions are tax-free, and on which tax is owed.
To contact us, visit our website at: https://www.cryptoaccountants.live/