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Where Taxpayers and Advisers Meet

CGT on crypto for expat

Joined:Wed Jan 13, 2021 6:16 pm
CGT on crypto for expat

Postby Jared » Wed Jan 13, 2021 6:41 pm

I am Polish citizen currently living and working in the UK.
Mid 2020 I have started to invest heavily into cryptocurrencies (bitcoin, Eth, ADA etc.).
Recently I have learned that the rules have changed and now I will have to pay CGT on my cryptos.
Therefore I have decided to move/expat to Singapore (my employer has an office in there) where there is no CGT at all.
Unfortunately because of COVID-19 it is likely that earliest when I will be able to expat is April/May 2021, so I may be forced to take profits before my expatriation.
My question is will I have to pay UK CGT if I take my profits from the market before moving to Singapore?
Or when HMRC comes in knocking to claim their cut in 2022 I can say I am no longer UK resident and tax payer and I'll be off the hook?
Much appreciate your help.

Joined:Fri May 16, 2014 3:47 pm

Re: CGT on crypto for expat

Postby AGoodman » Thu Jan 14, 2021 1:09 pm

The rules didn't change, HMRC just confirmed their view (which was pretty much what was expected).

Yes, as you suspect, if you sell an asset while UK resident, you will be liable for CGT on the gains, even if you later leave.

To avoid CGT on gains once you are non-resident, you might need to be away for 5 years (see the temporary non-residence rules). You might be okay if you have not been in the UK for 4 years prior to leaving.

If you are making large gains before leaving the UK, you could use the remittance basis. The key issue is the location of the assets, but unfortunately HMRC take the view that crypto tokens are located where the owner is located. It would therefore have to be a large amount of tax at stake for you to get the necessary advice and (if it was favourable) take a position averse to HMRC, potentially facing a challenge.

Return to “Capital Gains Tax, CGT”