HMRC has a 'new reason' to target bitcoin investors, it has been warned

The risk of owing capital gains tax and the rates on it are on the rise after the new Labour Party government Budget, Andrew Oxlade has warned to This is Money.

Investors in bitcoin and other cryptocurrencies could be in HMRC's sights after the Budget, it has been warned.

The risk of owing capital gains tax and the rates on it are set to rise after the new Labour Party government's Budget, Andrew Oxlade has warned to This is Money.

Even before the tax changes and the surge in crypto prices, HMRC had identified an opportunity, Mr Oxlade told the outlet.

It knows many, many people are using crypto exchanges and even banking apps to profit from crypto gains.

"It would appear to have data sharing agreements with businesses that offer such services."

He explained: "From 2026, HMRC will receive more data from exchanges through the Crypto-Asset Reporting Framework, an OECD-led initiative.

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"It is also worth noting that it considers some frequent trading to be liable to income tax. For most crypto fans though, CGT will be the challenge."

HMRC provide a list of the main types of cryptoassets which are exchange tokens, which includes cryptocurrency such as bitcoin and utility tokens, which provide access to particular goods or services on a platform.

Security tokens, which provide rights or interests in a business, such as ownership, repayment of a specific sum of money or entitlement to share in future business profits, are another example of crypto assets, according to the taxman.

Stablecoins, which HMRC summarise as having a premise of minimising volatility as they may be pegged to something with a stable value such as fiat currency (i.e. money such as pounds sterling or US dollars) or precious metals such as gold.

HMRC state that “in the vast majority of cases individuals hold cryptoassets as a personal investment, usually for capital appreciation or to make particular purchases”.

Where cryptoassets are within the scope of CGT, as is commonly the case for individuals, any disposal is a tax point which triggers the need to consider whether a gain or loss has arisen.

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