2nd May 2018
Jon Dawson (haysmacintyre)
Whether you believe in the power of blockchain technology or see it as the next ‘Dutch tulip bubble’ there is no doubt that Bitcoin and other Cryptocurrencies (CC) are having an impact around the world. Jon Dawson of the Creative, Media and Technology team at MSI's UK member firm haysmacintyre has written an article for the FinTech Times on the what lies ahead for Cryptocurrency.
Whether you believe in the power of blockchain technology or see it as the next ‘Dutch tulip bubble’ there is no doubt that Bitcoin and other Cryptocurrencies (CC) are having an impact around the world. According to predictions made by Santander, blockchain technology could cut banks’ infrastructure costs by up to $20bn by 2022 and Santander aren’t the only global bank taking the technology seriously.
Studies predict that in 2018 one third of millennials in the UK will invest in CC and The Telegraph recently suggested that ten of the biggest organisations across the world are “Bitcoin Billionaires, potentially including the FBI” – it’s easy to see where the hype is coming from.
With most governments and professional bodies yet to provide specific guidance, individuals and organisations are having to adopt what they consider to be appropriate accounting policies and calculate the tax treatment of transactions and holdings. Here are some of my thoughts:
Tax effects of Cryptocurrencies for individuals:
2017 may be for many, ‘the year I re-mortgaged my house and invested in Bitcoin off the back of a conversation I overheard from someone in the pub’. For many individuals, the tax year to 5 April 2018 will provide even more challenges when it comes to self-assessing. HMRC say it “will be looked at on a case-by-case basis, taking into account the specific facts. Each case will be considered on the basis of its own individual facts and circumstances.” – a view not considered by many to be the most helpful piece of advice ever given…
HMRC then go on to say in the same article that if a transaction is highly speculative, it’s not taxable, as in the case of gambling; they may come to regret this assessment in their article dated March 2014 (before the Bitcoin boom). We expect for most individuals, CC held as speculative investments will be subject to Capital Gains Tax (CGT), alongside shares, second properties and valuable artwork.
Read the full article on Cryptocurrency: Breaking the Silence
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