On 19 December 2018, HMRC published a Policy paper, Cryptoassets for individuals.
There are three classes of cryptoassets, namely exchange tokens, utility tokens and security tokens.
The paper reviews the taxation of exchange tokens (such as bitcoins) but does not specifically cover utility or security tokens. For utility and security tokens, the paper offers HMRC's starting position from which a different tax treatment may have to be applied.
Individuals are liable to pay income tax and National Insurance Contributions on cryptoassets which they receive from:
- their employer as a form of non-cash payment; and
- mining, transaction confirmation or airdrops.
Individuals are liable to pay capital gains tax when they dispose of their cryptoassets.