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With the looming deadline for the 2022/23 tax return filing this month, HMRC (Her Majesty’s Revenue and Customs) is prompting individuals a cryptoasset or multiple cryptoassets to carefully assess whether their transactions require reporting. It is imperative for cryptoasset holders to determine their tax liabilities, as HMRC expresses concern that individuals engaged in the sale or exchange of cryptoassets may be unaware of the obligation to file a tax return. Notably, a tax liability can arise even if no conventional monetary gains are received.

In particular, a tax return becomes essential if the capital gains, inclusive of those emanating from cryptoasset transactions, surpass £12,300. Additionally, if the aggregate disposal proceeds for the tax year exceed £49,200, a tax return is obligatory. HMRC emphasises the importance of self-assessment for individuals who have engaged in various cryptoasset transactions, such as selling a cryptoasset for fiat currency, exchanging one type of cryptoasset for another, utilising cryptoassets for purchases, gifting cryptoassets to others, or donating cryptoassets to charity.

It is crucial to note that certain situations may render the receipt of cryptoassets subject to income tax, such as instances where they are received from an employer or as a result of mining activities. HMRC advises individuals to consult the online guidance for comprehensive information on these matters. Therefore, cryptoasset holders are strongly urged to review their financial positions and assess their tax obligations diligently, ensuring compliance with HMRC regulations during this tax return filing period.

For specific advice and information on your own cryptoassets and tax circumstances, please contact us directly.