5 Instances When Crypto is Tax-Free in the UK!
It may be blurry how the taxation system works about cryptocurrency. Nevertheless, there are circumstances under which your crypto assets will not be charged to tax in the UK. Could that be real? Can crypto really be tax-free?!!
Well! We will learn that in this informative blog. This guide will help you understand when your crypto could be tax-free and how you can manage your assets wisely.
Are Crypto Assets Taxable?
Yes!!!
In most cases, cryptocurrency is taxable in the UK. However, if you think of it!! There are some cases when you don't have to pay tax on your cryptocurrency.
Note: Read when you have to pay taxes on cryptocurrency!
Let us consider such situations in greater detail.
1. When You Purchase Crypto with GBP
You will not pay tax when purchasing cryptocurrency with GBP – British Pounds.
It is, however, very important to record such transactions. Knowing how much you are spending will help calculate gains or losses when you sell or trade your crypto.
2. When You Transfer Crypto Between Your Wallets
This transfer is not taxed if you move crypto from one of your personal wallets to another. You still own the crypto; no profit or loss has been made. However, keeping track of these transfers for your records is still a good idea.
3. When You HODL Crypto Assets
When one has only held and not sold, there is no liability for crypto tax.
Note: If you eventually sell or trade your cryptocurrency, you are required to work out whether there are any capital gains or losses.
You should always record the date you bought and sold cryptocurrency. It will surely make everything easy!!!
4. When You Gift Crypto to Your Spouse or Partner
You can give crypto to a spouse or partner tax-free. It is allowed because transfers between spouses and partners are exempt from tax.
Coming to the future, though!!! When your spouse or partner sells the crypto, they might have to pay tax on any profit gained from selling.
5. When You Donate Crypto to a Registered Charity
Donating your crypto to a registered charity is income-tax-free. This means you will not pay tax on the value of the donated crypto. It could reduce your overall tax bill.
It all depends upon your circumstances!!
Contact the Best Crypto Accountants UK for Advice!
Not all crypto transactions are subject to tax. Some situations allow your cryptos to be free from tax.
Whether buying, transferring, holding, gifting, or donating crypto, you should know the UK tax rules above all. Details of all your transactions will keep you on top of the requirements. It will enable you to benefit from tax-free status whenever possible.
Our experts at Crypto Accountants can help you with tax advice.. We will make sure that you manage your assets in the most tax-efficient way possible.