Cryptocurrencies continue to become more mainstream, and the taxman’s very aware of the gains investors have made in the last five or six years.
Back in 2009, investors could snap up one Bitcoin for $1. Fast forward to January 2022 and it would cost $47,000 (£34,700) per Bitcoin – down from a November 2021 peak of more than $60,000 (£44,400).
There are other high-risk, speculative, volatile cryptocurrencies out there, too, and these continue to ensure speculative fortunes are being made and lost.
Bitcoin is by far the most well-known cryptocurrency. However, there are more than 1,000 others in existence, such as Ethereum, Ripple, Dogecoin, and Litecoin. Like many high-risk investments, these go through boom and bust cycles and, depending on when you buy (or acquire) them, they can make you either a millionaire or bankrupt you.
Cryptocurrencies don’t just pique investors’ interests; HMRC is taking a growing interest in their use and, of course, is keen for people to be reporting any gains.
In 2014, it issued basic guidance before replacing it with a comprehensive policy paper six years’ later that helps us all better understand HMRC’s stance.
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.