Introduction to cryptoasset taxation
Cryptoasset investment and transactions are an attractive alternative to traditional finance and are becoming increasingly mainstream. HMRC does not consider cryptoassets to be money or currency even though cryptocurrencies are being increasingly used as a pure means of payment. This remains HMRC’s position despite Bitcoin being recognised as legal tender in El Salvador since September 2021 and the Central African Republic between April 2022 and April 2023.
Cryptoassets in some regions are seen as being more stable than local currencies, despite their high risk and volatile nature. Employees working in regions where local currency is continually depreciating may prefer payment in cryptoassets, and yet guidance on the location of a cryptoassets leaves questions unanswered for those taxed in the UK, until 5 April 2025, on the remittance basis, or qualifying new residents from 6 April 2025 entitled to make a foreign income election, a foreign employment income election or a foreign gains claim.
The increasing ease of access to cryptoasset markets through mainstream platforms seems at odds with HMRC’s position that a
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