- The UK has extended a crypto tax break for foreign investors who buy crypto using local brokers.
- The move is in line with PM Sunak’s vision to turn the UK into a crypto hub.
Crypto investors from around the world have come one step closer to investing in the United Kingdom’s crypto market. The government of the United Kingdom has enforced a key regulation that will provide crypto tax relief to foreign investors who purchase through local brokers or investment managers.
UK: A crypto hub
According to an update provided by His Majesty’s Revenue and Customs, the UK’s tax, payments, and customs authority, the tax break came into effect on 1 January 2023. This provision exempts foreign investors that choose to invest in the UK’s crypto market using a local broker.
In addition to promoting foreign investment and fostering local investment managers, this provision will bring the United Kingdom a step closer to becoming a crypto hub. This vision was laid out by PM Rishi Sunak last month when the Chancellor of the Exchequer announced the Edinburgh Reforms.
The tax break will be extended to “cryptoassets” as defined in the OECD’s ‘Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard’. Crypto assets that are excluded include those which would not already fall within the Investment Transactions List.
This tax break is expected to attract global investors who will drive local businesses by hiring investment managers. The UK’s position as an investment hub will provide a stepping stone for the development of its crypto market.
Replacing EU’s banking and financial-market laws
It is important to note that this tax exemption only covers investors based outside the UK. Residents of the county are currently subject to a capital gains tax on their crypto investments which is levied in accordance with their tax brackets.
The tax break is part of a larger overhaul of the UK’s banking and financial-market laws following its exit from the European Union. The country’s Treasury unveiled a package of financial service reforms in December 2022, known as the Edinburgh Reforms, which sought to replace the EU’s laws.