UK Non-Resident tax returns and Bitcoin

During these turbulent times, when many people are facing a bleak financial outlook and the prospect of living off savings, there are still a few silver linings in the clouds. The Chinese word for a crisis, ‘Weiji’, is two words meaning; danger and opportunity. There are still a lot of opportunities during the current Covid 19 epidemic, and more coming with new normal. If you have been speculating on Bitcoin, or other crypto currencies, and have made a good profit, you may be thinking about the tax implications. Don’t worry, you may not have to pay tax in the UK on bitcoin profits if you are a UK Non-Resident.

HMRC and Bitcoin

HM Revenue & Customs (HMRC) has released updated guidance on the tax treatment of individuals on cryptocurrencies and certain exchange tokens, referred to by HMRC as “crypto-assets”, in its policy paper, “Crypto-assets for individuals”. This paper expands on the guidance previously issued in 2014, which dealt only with Bitcoin and similar cryptocurrencies.

It confirms that, depending on your personal circumstances, transactions in relevant crypto assets will either be subject to income tax as trading income or subject to capital gains tax (CGT) on the disposal of a chargeable asset.

HMRC and Bitcoin
Crypto assets and UK Non-residents

Crypto assets and UK Non-residents

HMRC’s view is that the taxation of bitcoin and crypto assets in the UK is dependent on where you are resident. People who are resident in the UK will be deemed to hold the crypto assets in the UK and, as these are deemed to be UK legal assets, any income or gains arising will be taxable in the UK. The same rules apply for people who are UK Non-Residents. Bitcoin and crypto assets will not be considered to be UK assets and therefore will not be subject to UK taxation. Please be aware that if you have been a UK Non-resident for less than 5 years the temporary non-resident rules may apply.

If you need advice on this, or any other aspect of UK Non-resident tax rules then the best thing to do is to get advice from a qualified, experienced UK Non-Resident tax advisor, like The Taxman UK

Remittance to the UK

People who are not domiciled in the UK are usually able to make a claim to file their taxes under the remittance basis, this means that only your UK income is subject to UK tax, and any overseas income or gains are not taxable in the UK on the basis that these are not brought into the UK. As UK resident individuals will be considered to hold their crypto assets in the UK, there will not be the option to exclude their crypto assets from UK taxation under the remittance basis.

If this all sounds complicated and you would rather just sit back and enjoy your profits from Bitcoin, and your other crypto assets, or watch them rise even higher, then ask The Taxman UK for good, professional tax advice for UK Non-Residents on your bitcoin and crypto assets, and any other aspects of your UK Non-Resident taxes too.

Please don’t hesitate to contact one of our experienced UK Non-Resident tax advisors by sending us an enquiry at help@thetaxmanuk.com for an initial consultation. Good tax advice will save you time, money and stress, whether you are a bitcoin trader, a crypto asset holder or just a UK Non-Resident.

The Taxman UK “Making Life Less Taxing for UK Non-Residents”

Remittance to the UK