HMRC has updated its guidance with a new section on how the location of exchange tokens affects the tax liability of non-domiciled individuals.
Throughout the time individuals are UK resident, HMRC will consider exchange tokens they hold as beneficial owner to be located in the UK.
HMRC takes the view that:
exchange tokens have an economic value, as they can be ‘turned to account’ by exchanging them for goods, services, fiat currency or other tokens;
exchange tokens are a new type of intangible asset (different to other types of intangible assets, such as shares or debentures); and
the only identifiable party to consider is the beneficial owner of the exchange token.
If an exchange token is co-owned between two or more beneficial owners, HMRC will apply TCGA 1992 s 275C. Each beneficial owner’s interest in the asset will be where that beneficial owner is resident. If one or more of the co-owners are UK resident, this will not affect the location for those co-owners who are not UK resident.
HMRC has updated its guidance with a new section on how the location of exchange tokens affects the tax liability of non-domiciled individuals.
Throughout the time individuals are UK resident, HMRC will consider exchange tokens they hold as beneficial owner to be located in the UK.
HMRC takes the view that:
exchange tokens have an economic value, as they can be ‘turned to account’ by exchanging them for goods, services, fiat currency or other tokens;
exchange tokens are a new type of intangible asset (different to other types of intangible assets, such as shares or debentures); and
the only identifiable party to consider is the beneficial owner of the exchange token.
If an exchange token is co-owned between two or more beneficial owners, HMRC will apply TCGA 1992 s 275C. Each beneficial owner’s interest in the asset will be where that beneficial owner is resident. If one or more of the co-owners are UK resident, this will not affect the location for those co-owners who are not UK resident.
