Although Bitcoin hit the 30,000 level after days of violent deposits that swept the crypto market, a large chunk of investors have remained submerged ever since. The recent market sell-off led by Terra and its two native cryptocurrencies plunging in value at one point wiped out the crypto market’s total gains made as of 2021.
But for fearful investors in Britain who suffer losses, they can now offset them against future gains in tax returns, according to HM Revenue and Customs (HMRC), the UK government’s non-ministerial department responsible for tax collection.
With regard to taxes, HMRC said it views cryptocurrencies such as bitcoin in the same way as equity investments, as reported by Yahoo Finance. Paul Webster, a director of the retail client tax team at Kreston Reeves, claimed that investors now no longer have to worry about tax liabilities related to crypto investments, as “losses can be credited against HMRC and offset against future profits.” The director further clarified that the tax authorities see crypto profits as a kind of capital gain with a 20% tax to be paid. Meanwhile, such losses can be used to offset future gains on capital gains from other forms of investment, such as real estate. Webster noted that since the sale of some digital assets can cost more than their value, investors may not be doing anything to avoid additional losses. According to the UK authority, such claims of negligible value can be carried forward indefinitely while being eligible for future credit of profits. For any UK investor, the annual capital gains fee is £12,300 as this also applies to crypto investments. Investors can also give their spouse or registered partner assets without additional capital gains tax, doubling available tax-free profits each year. Governments around the world have redoubled their efforts in formulating tax policies regarding crypto investments. As previously reported by CryptoPotato, India’s tax authorities – the GST council – brooded over the top 28% GST bracket for crypto profits, equating the sector with casinos, lotteries, gambling and horse racing, mainly due to its characterized speculativity in digital assets.
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