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A UK-domiciled and resident taxpayer has invested in bitcoins, the new online currency. A substantial gain was made on the sale of the bitcoin holdings, but how should this be treated for tax purposes?
My client who is UK-domiciled and resident has invested in bitcoins. He made several purchases while the price was low and has now sold the bitcoins at a profit. The proceeds are currently held in the bitcoin exchange which is based in Japan and are denominated in US dollars.
Although I do keep hearing of this new electronic currency in the media it is not something that I know very much about. Is it a normal currency and treated as such for tax purposes?
I should be most grateful if readers could provide advice on how the profit from these bitcoins should be declared and taxed?
Query 18 233 – Little Bit
Reply from Godalming
There is no clear definition of “currency” for tax purposes. However it is clear that if it is currency then it is foreign currency and so an...
