UK Tightens Crypto Rules: What You Need to Know

The UK is enhancing its crypto tax regulations. From 2026, crypto platforms will be required to report all transactions made by UK users. This initiative aims to prevent tax evasion through cryptocurrencies.

Key Changes

• Automatic Reporting: HMRC will gain automatic access to both local and international crypto data.
• OECD Compliance: The rules align with OECD standards, mandating crypto companies to verify user identities and report detailed transaction information annually.
• Domestic Tracking: Previously, only cross-border transactions were automatically reported. Now, all transactions, including those within the UK, will be tracked.

Why These Changes?

The UK aims to ensure that crypto is not used to evade taxes. By reporting all transactions, authorities can monitor activities and ensure fair taxation. This also simplifies reporting for crypto companies and provides tax authorities with comprehensive data.

New Tax Rule for DeFi Users

The UK has proposed a new rule for DeFi users, stating that capital gains taxes will only be applicable upon the sale of tokens. This simplifies and makes the tax process more predictable for the crypto industry.

Global Crypto Tax Updates

• South Korea: Cracking down on crypto tax evasion by seizing crypto in cold wallets and searching homes for hardware wallets if tax evasion is suspected.
• Spain: Proposing to raise the top tax rate on crypto gains to 47%.
• Switzerland: Postponing the start of automatic crypto information exchange until 2027.
• United States: Introducing the Bitcoin for America Act, allowing Americans to pay taxes in Bitcoin without incurring capital gains taxes on such payments.