The United Kingdom has instituted a tax exemption for non-residents and overseas investors as part of its most recent move to establish itself as a global cryptocurrency powerhouse.
Users who buy digital assets through regional investment managers or brokers are excluded from the rule.
A new crypto tax exemption for non-residents and foreign investors went into effect on January 1, 2023, as part of newly elected Prime Minister Rishi Sunak’s plans to make the U.K. a worldwide cryptocurrency hub, CoinDesk reported that the U.K. government’s tax arm, HM Revenue and Customs, said in an email
“This exemption is an important factor in attracting global investors, meaning foreign investors won’t be brought into U.K. tax simply by appointing U.K.-based investment managers.
Then it added
“To build upon the U.K.’s position as an investment management hub, this exemption has been extended to include crypto assets, so that funds which include them aren’t put off from appointing U.K. managers.”
The UK offers a tax guide for resident cryptocurrency traders, and in July, HM Revenue and Customs held a consultation with investors and specialists on how to tax decentralized finance.
In recent comments, the Bank of England discussed the risk posed by cryptocurrencies and the imperative need for industry regulation. The deputy governor of the BoE emphasized that cryptocurrency trading is “extremely risky” to be left unregulated and said that failure to take action could result in “a systemic problem.”
The BoE may soon regulate the sector, the deputy governor continued, in an effort to safeguard investors from the risks connected with cryptocurrency trading and the larger financial system from any negative effects that may result.
According to the BoE, ordinary investors ought to be allowed to securely speculate on cryptocurrencies, just like they can in traditional markets.