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April 26th 2021

Cryptoassets: trading is not gambling, says HMRC

HMRC does not consider crytocurrency trading to be the same as gambling, according to the latest version of its cryptoasset manual.

They note that the term "gambling" is not defined in any of the primary Income, Corporation and Capital Gains Tax Acts, and whether or not a transaction can be characterised as betting or gambling is largely "a question of fact".

Gambling winnings are generally not subject to Income or Capital Gains Tax in the UK, so some taxpayers will doubtless be tempted to argue that income and gains from cryptoasset trading amount to gambling winnings and are therefore not taxable.

Such an argument is highly likely to be challenged by HMRC, in fact Officers are advised to refer any cases where taxpayers adopt this stance.

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