The Royal UK Revenue and Customs Service (HMRC) has updated its guidance on taxation of cryptoassets to include income from staking PoS networks.
The updated HMRC taxation guidelines now include specificities for taxation of income generated from staking on PoS networks and are almost identical in wording to the guidelines for mining. Previously, the regulator implied that staking was related to mining, so the same recommendations were applied. A spokesman for HMRC commented on the publication of the document:
“The guide demonstrates our commitment to providing clarity to consumers and will help individuals and companies understand the tax implications of various types of cryptoasset transactions. The guidance builds on previously published strategy papers and will provide a more flexible approach to updating consumer information in this rapidly evolving sector. ”
According to the new guidance, the taxation of staking transactions by businesses will depend on whether the activity constitutes a “taxable transaction”. This depends on a number of factors, such as the degree of activity, the type of organization, the associated risk and the commercial value of the activity.
Depending on the situation, staking income will be taxed as other income or other rules as applicable. With respect to individuals, HMRC believes that “only in exceptional circumstances” can it be expected that “individuals will buy and sell cryptoassets with such frequency, level of organization and complexity that the activity may constitute a financial transaction”.
Any crypto assets held by individuals or legal entities will be subject to capital gains tax and corporate income tax if subsequently sold.
Last October, cryptocurrency exchange Coinbase said it would release data to the UK tax authorities on its customers who received over £ 5,000 worth of crypto assets over the past year.
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