How to Avoid HMRC When Investing in and Selling Cryptocurrency
HMRC UPDATEED THEIR GUIDANCE ON THE TAXATION OF CRYPTOCURRENCY IN THE UK EARLIER THIS YEAR. While there were no major changes, many crypto enthusiasts saw this as another indicator of the IRS’s expanding interest in the financial sector.
Patrick Cannon, a tax attorney, has revealed the top five strategies to invest in and sell cryptocurrencies without drawing the notice of HMRC in an exclusive interview with This website.
Mr. Cannon is also the founder of Cannon Chambers, a firm that specializes in providing taxation advice and advocacy.
He has been receiving an increasing number of cases from persons who have invested in Bitcoin and have run into tax problems in the last couple of years.
Mr Cannon explained, “HMRC is adopting a more serious approach to taxpayers who invest or trade in cryptocurrencies like Bitcoin and Etherium and fail to disclose or remit the correct amount of tax.”
“Trading platforms like Coinbase make it simple for the armchair investor or day trader to invest and trade in cryptocurrency, but it’s critical to have a basic awareness of the tax consequences so that you can meet your tax reporting and payment obligations.”
Despite growing concerns about how cryptocurrency is taxed, he is convinced that his guidance will prevent consumers from receiving a letter from HMRC when they invest and sell on the market.
While most Britons may utilize cryptocurrency for personal investments, the tax expert warns that any eventual sell might be dangerous.
“Most people who buy and sell crypto do it as a personal investment; either to leave it to rise in value or to save for a specific asset purchase,” Mr Cannon explained.
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“Keep in mind that any sale or other disposal – such as a gift to someone else – will result in a Capital Gains Tax duty, even if the funds are re-invested in another type of crypto or in more traditional assets.”
Individuals and corporations who invest in crypto should be more aware of the tax benefits they would receive if they participate on a regular basis.
“If you purchase and sell crypto on a regular basis, or as part of a firm trading in crypto, your trading earnings will be subject to Income Tax rather than Capital Gains Tax – after setting off.”Brinkwire Summary News”.