The British tax office has introduced a grace period for losing crypto investors

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The UK Revenue and Customs Authority (HMRC) to reduce panic among crypto investors will allow them to offset losses through future tax revenues.

British HMRC now considers investments in cryptocurrencies as investments in traditional assets and invites local investors suffering losses to indicate tax revenues taking into account future profits. Paul Webster, director of private client taxation at Kreston Reeves, clarified that investors no longer need to worry about tax liabilities in relation to investments in cryptocurrencies, since “losses can be offset by future profits.”

Webster explained that the tax authority treats cryptocurrency gains as a form of capital gain, with a tax paid at a rate of 20%. He added that such losses could be offset by future capital gains from other forms of investment such as real estate.

Webster noted that thanks to this decision, it will be possible to avoid selling cryptocurrencies in cases where it is unprofitable. Thus, investors may not get rid of unprofitable digital assets in order to avoid additional losses. Such claims for negligible value can now be deferred indefinitely and may be set off in the future.

For every UK investor, the annual capital gains allowance is £12,300 (over $15,000), this now applies to crypto investments as well. Investors will be able to transfer crypto assets to their spouses or civil partners without additional capital gains tax, effectively doubling the available tax-free income each year.

Not all tax services are ready to enter into the position of taxpayers. For example, India, on the contrary, is tightening the taxation of cryptocurrencies. In March, the Upper House of the Indian Parliament approved a bill to double the tax rate on transactions with cryptocurrencies to 30%. In April, the Indian Ministry of Finance announced plans to introduce a 1% tax on all digital asset transfers over Rs 10,000 ($132) from July 1.


Source: Bits

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