People investing and trading in cryptocurrencies will soon have to declare any income in their self-assessment tax returns.

The new Government guidance will introduce these changes from the 2024/25 tax year onwards, bringing greater scrutiny to the reporting of all crypto transactions, including cryptocurrencies and non-fungible tokens (NFTs).

According to the Spring Budget costing document, increased reporting requirements and compliance could result in HMRC receiving an extra £10 million in CGT receipts per year.

As a result of these changes, cryptoasset holders must ensure their tax reporting is up to date. They should also keep detailed records of their assets, including the type, number and value of the tokens.

Under UK rules, transferring one cryptoasset to another is considered a disposal. This means the rule change could also affect investors who have not yet accessed their cryptoassets.

Meanwhile, HMRC will treat tokens gained via mining as other taxable income. This income must be declared on self-assessment forms - unless the taxpayer receives assets worth less than £1,000.

With the annual exemption allowance for capital gains tax (CGT) set to decrease to £3,000 from April 2024, this could have a greater impact on taxpayers making smaller gains.

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