Cryptocurrency Tax

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Tax Requirements When Investing or Trading In Cryptocurrency

Many crypto investors believe they will not have to pay tax on any profits made from their crypto related activities, but this is not the case. Due to the potential for large amounts of gains, cryptocurrency investments have gained the attention of both the IRS and HMRC. Both of these bodies want to ensure that all individuals are paying the correct amount of tax on their cryptocurrency and other crypto assets.

You should be aware of your tax obligations for your crypto activities, and seek professional advice from a cryptocurrency accountant and tax advisor.

Xerxes Associates LLP are chartered accountants and tax advisors for US citizens living and working in London or the UK. We offer all US and UK Expats who have made gains in crypto and blockchain investments, a range of tax advice services alongside our other broader specialist crypto tax service.

Cryptocurrency Taxation

Cryptocurrencies & Crypto Assets Taxation

It is important to recognise and be aware when a tax event has occurred giving rise to potential taxes being owed to HMRC and the IRS. Taxes such as capital gains tax, income tax, and inheritance tax are all relevant to the purchase, sale, and acquisition of cryptocurrencies.

Based on the frequency and value of buying and selling crypto assets, this can generally be considered an investment activity that is subject to capital gains tax. A tax exemption is available every year, but if it is exceeded – for instance, by the sale of other assets such as shares or property – taxes must be paid.

Gains may also result from the exchange of crypto assets or when they are gifted to another person, or when they are used to pay for goods and services. Our team can assist you with calculating the gain, preparing the tax return, and effective tax planning so that you receive the maximum tax benefits. This calculation can be complex, particularly if you are also disposing of other assets during the tax year.

Tax Advice And Assistance For Individual Crypto Investors

Our cryptocurrency tax advisors can help you structure your affairs in a way that is tax efficient and ensures you pay the correct amount of tax.

For those of you who have invested and traded crypto or believe the tax hasn’t been handled correctly, we can help with our fast and diligent service. As UK & US Tax Accountants, Xerxes Associates LLP offer more than just the basic advisory and tax return preparation services.

Feel free to get in touch for a no obligation chat, simply complete our call back request form and we will get in touch with you.