Crypto assets changes to tax return welcomed

The Chartered Institute of Taxation has welcomed changes announced in the Budget which will separately identify crypto assets in self-assessment tax returns’ capital gains tax pages from 2024.

Gary Ashford, Deputy President of the CIOT, said:

“Highlighting the need to declare crypto asset transactions in the tax return will help raise awareness of people’s obligations in this area. However much more needs to be done to counter widespread ignorance of tax payment and reporting requirements for crypto.

“Crypto assets are as chargeable to capital gains tax (CGT) as any other investment asset, but concern exists as to how widely known compliance obligations are, particularly amongst those professionally unrepresented.

“Many low-income taxpayers have invested in these assets but research suggests barely a third of them are professionally represented or have a good understanding of CGT, nearly half having not seen any information/guidance on the subject. 84 per cent of crypto asset owners won’t have sought tax advice.¹

“Currently there is no international reporting standard in relation to crypto and the Crypto-Asset Reporting Framework is not due until 2026.

“CIOT is urging HMRC to do more to facilitate the reporting of crypto asset disposals and to raise awareness of the need to report disposals of such assets.

“By April 2024, the CGT annual exemption will have been reduced to £3,000 (£1,500 for trustees), so there is a likelihood that up to 300,000 extra individuals could be subject to CGT due to this decrease². By having crypto assets clearly identifiable within the CGT pages of tax returns, this will hopefully tell investors that these investments are subject to reporting as well.”