Introduction
The UK has become a remarkable crypto-friendly country in the world today. The welcoming attitude towards crypto in this country has contributed so much to the high increase in the number of crypto traders in the country today. The growth rate of crypto owners in the country increased significantly in 2022 compared to the previous records in the past years.
The government is currently working towards promoting a more conducive environment for crypto trading in the country by offering a tax break for Crypto investors in the UK. This will encourage more people to buy cryptocurrency in the UK henceforth.
This work has therefore examined the major effects the current tax break offered to crypto traders in the UK today will likely have on crypto investments within the country.
What is a tax break?
The term tax break is used to describe a temporary exemption from paying tax offered by the government to a given category of investors to encourage more growth within the such sector. The duration of the tax break is usually determined by the government through the lawmakers.
Meaning of Crypto Investors
Crypto investors refer to traders who indulge in any form of crypto trading to make profits. Anyone who buys and sells crypto to make gains is best known as a crypto investor.
UK announces tax break on Crypto investments
In furtherance of the quest to become the world’s most innovative and competitive global financial center today, the UK government has announced that it will extend tax breaks given to investment managers to include crypto assets.
According to the report, doing so will facilitate its inclusion in the list of portfolios of overseas funds managed in the UK. This was announced by Jeremy Hunt – the Chancellor of the Exchequer Conservative on December 9, 2022. He further revealed that the government aims to implement this new policy through Her Majesty’s Revenue & Customs regulations before the end of the year 2022.
The present decision is just one of the other steps taken by the government towards making the country a crypto hub after it announced earlier that it would soon legalize the use of stablecoins for making payments in the country.
What effects will the UK’s recently announced tax break for Crypto investors have on crypto today?
Crypto investors are often very curious to maximize their profits. Hence, offering a tax break to crypto traders in the UK today will go a long way in boosting crypto trading within the country. Many investors will likely increase the volume of their investment in Crypto given the fact that there is no more tax to be charged from the profits made during the period of the tax break. New investors will likely join crypto trading during this period too.
The crypto market will equally benefit from the current tax break offered to crypto traders in the UK today. More crypto traders will likely migrate to the UK to carry out their trading in a calm environment. Other crypto companies existing in the UK will thrive too.
Is crypto a legal tender in the UK today?
Crypto is officially recognized as a digital asset in the UK today. Hence, UK laws allow citizens to trade crypto without an infringement on the law. While crypto trading is legal in the UK, it is yet to be considered a legal tender within the country as we find in a few countries today. Nonetheless, the UK government is working towards promoting stablecoins as legal tender in the UK before the end of 2023.