How Reduced CGT Allowance Puts Crypto Investors At Risk
Protecting your crypto investments ...
Posted by Helen Beaumont on 08/05/2024 @ 8:00AM
If you are a crypto investor in the UK, you need to be aware of the tax implications of your investments. With the reduced CGT allowance of just £3,000, you may find yourself facing unexpected tax bills and penalties ...
As a crypto investor, you must keep accurate records of your transactions!
This is a serious issue, especially since the CGT allowance was recently reduced so you must keep accurate records and stay informed about your tax obligations to avoid any surprises from HMRC. You may not even be aware that you are required to report and pay taxes on gains made from crypto investments.
HMRC has announced that starting from the tax year 2024/25, there will be a dedicated section on self-assessment tax returns for reporting gains from cryptoasset disposals. This is a positive step towards ensuring that relevant transactions are reported to HMRC!
The reduced CGT allowance means that more people will fall under the obligation to report and pay taxes on their crypto investments. This includes those who may have never had to report capital gains before. The risk of facing penalties from HMRC is higher, as many individuals may not be aware of their tax obligations or may not keep proper records of their transactions.
To avoid any unexpected tax bills or penalties you must understand the CGT allowance is now at an all-time low and keep accurate records of your transactions. It is also important to note that any gains made from crypto investments must be reported, even if they are reinvested into other cryptoassets.
"However, HMRC must also take steps to increase public awareness!"
This could include targeted campaigns and educational materials to inform investors about their tax obligations. By doing so, HMRC can ensure that more people are aware of their tax obligations and are able to report and pay taxes correctly.
In addition, there are calls to review the reduced CGT allowance and consider increasing it to a more reasonable level. This would help ease the tax burden on investors and reduce the risk of unexpected tax bills. It is important for the Government to consider the growing popularity of cryptoassets and the potential impact on investors' tax liabilities.
Remember, it is crucial that you keep accurate records of your transactions and stay informed about any tax obligations.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the Capital Gains Tax liabilities for crypto investors, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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