HM Revenue and Customs (HMRC) department of the UK has declared that cryptocurrency investors can now compensate for crypto losses with future crypto profits. The announcement of HMRC brings a sigh of relief for cryptocurrency investors in the United Kingdom (UK). HMRC is a non-ministerial department of the UK government in charge of tax collection.
Big relief for UK cryptocurrency investors
As per the announcement of HMRC, cryptocurrencies such as Bitcoin will be treated similarly to equities investments in terms of taxation. In the announcement, Paul Webster, a director in Kreston Reeves’ private client tax practice, stated that investors will no longer be concerned about tax implications associated with cryptocurrency investments. He further stated that crypto investments, including losses, can now be booked with HMRC and offset towards future gains.
With this action, the HMRC considered cryptocurrencies earnings as a kind of capital gains, with the tax due being comparable to 20%. As a result, losses incurred as a result of crypto-related investments might be subtracted against future capital gains earned from other assets such as real estate.
Cryptocurrency gains are now eligible for capital gains allowance
As per the announcement of HMRC, cryptocurrency investors will be entitled to a £12,300 yearly capital gains allowance, which will apply to all UK investors. Investors can also give their wives and civil partners assets away to avoid paying a capital gain tax that would be twice the possible tax-free allowance each year.
Crypto tax plans in India
Governments all across the world have increased their attempts to collect taxes on cryptocurrency investments. In India, the GST council is also considering a 28% GST on crypto earnings. India would tax cryptocurrencies such as the lottery, gambling, casinos, and horse racing with this levy. As a result, cryptocurrencies will be classified as speculative assets.
