United Kingdom to Exempt Foreigners from Crypto Taxes

HMRC claims that the exemption is “an important factor in attracting global investors.”

The government of the United Kingdom has decided to enforce tax exemption for foreign investors buying cryptocurrencies through local brokers and investment managers.

According to the document regarding Tax on Foreign Crypto Purchases, the new tax break comes into force from January 1st, 2023 and applies to the 2022/2023 tax year and “subsequent years for income tax.” Nevertheless, it applies to “accounting periods which were current on the date the regulations were made (19 December 2022).”

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Regarding the matter, Her Majesty’s Revenue and Customs (HMRC) stated:

This exemption is an important factor in attracting global investors, meaning foreign investors won’t be brought into U.K. tax simply by appointing U.K.-based investment managers.

On top of that, HMRC revealed that this move is a part of the county’s goal to become “an investment management” and crypto hub. Nevertheless, HM Revenue and Customs added:

This exemption has been extended to include crypto assets so that funds which include them aren’t put off from appointing UK managers.

It is worth noting that the country has released a tax guide for local crypto traders. HMRC believes that crypto-related taxes could be subject to both Capital Gains Tax and Income Tax. 

The guide states that investors who collected capital gains of over £12,300 tax-free allowance will have to pay 10% or 20% in tax. On the other hand, investors who gained additional income in crypto will have to pay Income Tax of 20% to 45%.

At the beginning of December, the news broke that the Treasury of the United Kingdom is looking to tighten crypto regulations.

by Gile K. – Crypto Analyst, BitDegree