We have written some articles on UK crypto taxation before – https://htj.tax/?s=hmrc+crypto+uk
HMRC treat a profit on disposal as a capital gain of a UK- sited investment; they issued guidance in 2014, 2019 and again in 2022. However, treatment does not follow a long series of decisions in what is the nature of ‘trade’ which suggests that buying and selling cryptocurrency may be trading.
It may also be important to know where it is sited. HMRC look at the location of the Private Keys and say that crypto is sited where the owner is resident. HMRC apply pooling rules. The usual capital gains tax is 20%. The HMRC view may change, as it did in relation to residence and IR20 and the situs loans; a White Space Disclosure may be wise, or the taxpayer may be protected by the Practice Generally Prevailing doctrine.
