Tax treatment of speculative digital currency transactions – UK


HMRC Guidance Note March 2014 mentions that the application of income, corporation or Capital Gains to a transaction will depend on the facts. See as follows:

“Whether any profit or gain is chargeable or any loss is allowable will be looked at on a case-by-case basis taking into account the specific facts. Each case will be considered on the basis of its own individual facts and circumstances. The relevant legislation and case law will be applied to determine the correct tax treatment. Therefore, depending on the facts, a transaction may be so highly speculative that it is not taxable or any losses relievable.. For example gambling or betting wins are not taxable and gambling losses cannot be offset against other taxable profits.”

So although the tax position from HMRC is comprehensive a lot will depending on your circumstances. If you are engaged in highly speculative transactions in digital currency then this quote suggests that these transactions may not be taxable. Check with your accountant or HMRC on your particular situation.