Disclosure of crypto-asset income & gains

January 11, 2024by Frontier Group

HMRC is inviting taxpayers to make a voluntary disclosure of Income Tax or Capital Gains from crypto assets.

Crypto assets include exchange tokens, e.g. bitcoin, NFTs (non-fungible tokens) and utility tokens.

There are currently two voluntary disclosure options being publicised. The first option is known as the digital disclosure for those who are not up to date with their tax affairs, or the second option is the contractual disclosure facility for those who want to admit tax fraud and want to avoid criminal sanctions.

Most individual investors will be subject to Capital Gains Tax (CGT) on gains and losses on crypto assets. For CGT purposes, a capital loss may be claimed if a crypto asset becomes of negligible value.

Digital disclosure

HMRC gives taxpayers three options to disclose to get their tax position up to date:

  • Despite taking reasonable care to make sure you paid the right amount of tax.
  • Through carelessness
  • Through deliberate actions

Contractual disclosure facility

The contractual disclosure facility: if you want to make a disclosure because your deliberate behaviour has caused a loss to HMRC of any of the taxes, duties, levies, or payments it administers.

Please contact our team for further information.

Frontier Group